DELTA PETROLEUM CORPORATION
Roger A. Parker, Chairman and CEO
John R. Wallace, President and COO
Kevin K. Nanke, Treasurer and CFO
370 Seventeenth Street, Suite 4300
Denver, Colorado 80202
DENVER, Colorado (December 12, 2007) – Delta Petroleum Corporation (NASDAQ Global Market: DPTR), an independent energy exploration and development company (“Delta” or the "Company”), today provided the following update regarding its production, drilling and other operating activities.
OPERATIONS UPDATE
Greentown Project, Paradox Basin, UT, 70% WI – The Company has drilled the Federal 28-11 to a depth of 9,472 feet, which was reached on November 19, 2007. At that time, the well began flowing and flaring natural gas at bottom hole pressures of approximately 8,000 psi from the lowest interval referred to as the “O” zone. The “O” zone is the same clastic interval that caused the surface blow out in the Company’s Greentown State 36-11 discovery well. The pressures experienced in this interval are very consistent with pressures seen in both the Greentown State 36-11 and 32-42 wells, which are 6 miles to the north and l.5 miles to the south, respectively. For approximately two weeks the well flowed at rates and pressures that made it challenging to run production casing, which has now been accomplished. The Federal 28-11 well has encountered the same sequence of alternating clastic intervals and interbedded salt sections as found in the Company’s two previously drilled Greentown project wells. The results from the Federal 28-11 thus far, in conjunction with the initial results from the Greentown State 36-11 and Greentown State 32-42, provide the Company ample evidence to believe in the economic viability and immense reserve potential of the Greentown Field. Within an 11 township area surrounding the Greentown Project, 38 wells have now been drilled that penetrated at least some of the Paradox Salt section. Based on this control, the Paradox Formation can be characterized as consistent and continuous over a large area.
The Company is also drilling the Greentown Federal 36-24 which is located three-quarters of a mile south of the previously referenced 36-11 discovery well, and 1.5 miles southeast of the Federal 35-12 well. The 35-12 well was temporarily abandoned this summer due to excessive over-pressuring in the upper interval at approximately 5,700 feet in depth. The Federal 36-24, which has drilled through the same upper over-pressured intervals that were evident in the Federal 35-12, did not encounter any excessive over-pressuring and appears to be hydrocarbon-bearing in all clastic intervals encountered thus far based on mud log shows. Information from the other 37 wells drilled in the immediate area also did not encounter this degree of over-pressuring, further substantiating our belief that the excessive over-pressuring experienced in the Federal 35-12 was anomalous and localized.
With regard to the Greentown pipeline project, the National Environmental Protection Act (NEPA) work has been completed, and the environmental assessment has been submitted to the Bureau of Land Management. The Company believes that new well permits and the pipeline permitting process will move forward in an expeditious manner. Pipeline construction and initial operations should occur by the end of the second quarter of 2008.
The Company expects to report additional results from the Paradox Basin in the near future and will continue to drill with two rigs in the Greentown project.
Central Utah Hingeline Project, UT, 65% WI – The Federal 23-44 well has drilled the Navajo Formation on the Company’s Parowan Prospect. The Navajo exhibited good porosity and permeability, but resistivity logs indicate that the Navajo Sandstone appears to be water-bearing. The Company has set intermediate casing and is currently drilling its second primary objective, the Kaibab Formation. The Kaibab Formation is productive in the Upper Valley Field, which has produced 27 million barrels of oil from 25 wells and is located approximately 67 miles to the east. The nearest well to the Parowan Prospect that penetrated the Kaibab Formation was drilled by another operator 16 miles to the southwest and had both mud log and sample oil shows. To date, drilling information from the Federal 23-44 is consistent with the geophysical interpretation that identified a large structure. The well is expected to reach total depth by the end of December.
Vega Unit and North Vega, Piceance Basin, CO, Avg. 50 – 100% WI – The Company continues to develop the Vega Unit area with four rigs and should have 67 wells producing and 24 wells drilled and waiting on completion by year end, at which time the productive capacity of Vega area wells should exceed 40 million cubic feet (Mmcf) of natural gas per day. Additional pipeline capacity should be available by the end of the first quarter in 2008, when production rates should increase accordingly.
Other Areas of Operations – The Company will provide additional updates and information related to properties in Wyoming, Texas and Washington at the investor conference to be held in Denver on December 13, 2007.
ADDITION TO SENIOR MANAGEMENT TEAM
Manager of Regulatory Compliance - The Company is pleased to announce that Brian Macke has accepted the position of Regulatory Compliance Manager. Mr. Macke was most recently Director of the State of Colorado Oil and Gas Conservation Commission. His extensive experience and contacts that involve permitting, regulatory reporting, environmental assessment and other compliance issues should prove invaluable to the Company’s continuing exploration and production activities.
PRODUCTION GUIDANCE
The Company reaffirms its fourth quarter production guidance of 4.95 – 5.13 billion cubic feet of gas equivalents (Bcfe), as well as previously stated guidance for 2008 that anticipates production increases of 40% – 60% above 2007 levels.
ANALYST CONFERENCE
As previously announced, the Company will host an investor conference that will be webcast on Thursday, December 13, 2007, at 10:00 a.m. (EST) at the Westin Tabor Center in Denver, Colorado. Shareholders and other investors may listen to a live webcast of the conference at http://www.videonewswire.com/event.asp?id=44280. The webcast may also be accessed through the Company’s website at http://www.deltapetro.com/eventscalendar.html. A replay of the webcast will be available until December 20, 2007.
Delta Petroleum Corporation is an oil and gas exploration and development company based in Denver, Colorado. The Company’s core areas of operations are the Gulf Coast and Rocky Mountain regions, which comprise the majority of its proved reserves, production and long-term growth prospects. The Company has a significant drilling inventory that consists of proved and unproved locations, the majority of which are located in its Rocky Mountain development projects. Its common stock is traded on the NASDAQ Global Market under the symbol “DPTR”.
Forward-looking statements in this announcement are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that all forward-looking statements are based on management’s present expectations, estimates and projections, but involve risks and uncertainty, including without limitation, uncertainties in the projection of future rates of production, unanticipated recovery or production problems, unanticipated results from wells being drilled or completed, the effects of delays in completion of gas gathering systems, pipelines and processing facilities, as well as general market conditions, competition and pricing. Please refer to the Company’s report on Form 10-K for the fiscal year ended December 31, 2006 and subsequent reports on Forms 10-Q and 8-K as filed with the Securities and Exchange Commission for additional information. The Company is under no obligation (and expressly disclaims any obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
For further information contact the Company at (303) 293-9133 or via email at info@deltapetro.com
OR
RJ Falkner & Company, Inc., Investor Relations Counsel, at (800) 377-9893 or via email at
SOURCE: Delta Petroleum Corporation