California Projects

California #1–1 / Lonestar Prospect

On September 1, 2010, the Company entered into an agreement for the joint exploration and development of the Lonestar Prospect located in California, USA. Delta and its partners commenced drilling the well in mid September and reached total depth of approximately 6,015 feet. Delta and partners have established that this well has intersected substantial pay in the Forbes formation at a measured depth of 5940 to 5960 feet. This has aligned with our extensive seismic reviews and demonstrates that our well has successfully penetrated a significant proven natural gas reservoir.

As anticipated, all logging clearly indicated approximately 20 feet of natural gas pay with significant reserves of natural gas. There is no indication of the presence of a water drive in the reservoir.

Delta owns a 25% gross working interest in this well. The well is producing up to 4.2 million cubic feet of gas per day. Although the well is capable of higher production rates, the Company has been forced to restrict it’s flow rates due to PG&E line pressure issues. Notwithstanding, Delta is very pleased with this well’s production profile.

King City

On May 25, 2009, the Company entered into a Farm-out agreement with Sunset Exploration to participate in a drilling and exploration of lands located in California, USA. The Company shall pay 66.67% pro rata share of 100% of all costs associated in the initial test well. If the test well is capable of producing hydrocarbons, then the Company shall pay its working interest pro rata share of all completion costs. The Company’s working interest is 40% of 100% in the Area of Mutual Interest.

The Company, and its partners currently hold the rights to 10,000 acres of prospect lands in and around the San Barnabe Vineyard located in Monterey County, California . All referenced lands were shot with a 2 dimensional seismic swath as well as a gravity survey. The prospect area is in and around the King City Oilfield, and the current data will enable the Company to effectively test the entire Monterey sections that were missed from old data implemented prior to the original field discovery. Total depth for drilling will be approximately 4000 feet and it is expected that the Monterey section will be encountered from 2000 feet to 4000 feet in depth. Timing to commence drilling operations will be during the month of May 2011 and all permitting operations have been approved by Monterey County pending finalization of issues surrounding grading plans.

Delta owns a 40% gross working interest in this project.