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Owl CREEK
The Owl Creek prospect involves 1,120 acres of petroleum production potential located in Garvin and McClain counties in south central Oklahoma, USA.
In June 2006, Delta Oil & Gas entered into an agreement to accept the assignment of an undivided 20% working interest in a potential oil well known as the Powell #2 and an option to purchase a 20% interest in all future wells drilled on the land surrounding Powell #2. In addition, Delta has an option to participate in any lands of mutual interest that may be acquired in the future by the Owl Creek participating partners.
The Powell #2 well was drilled to a total depth of 5,617 feet on May 18, 2006. After reviewing a complete suite of open hole logs performed on this prospective well, two potential hydrocarbon showings were revealed. The first was in what is known as the "Upper Viola" zone. This showing was over 50 feet thick. The second showing was in a deeper zone with good porosity, permeability and calculated productive.
The operator has successfully drilled four wells at the Owl Creek Prospect, in three of which Delta has an interest. The "Powell #2," in which we have an interest, is currently producing, on average, between 100 and 150 barrels of oil per day along with approximately 40 to 45 mcf of natural gas. From its completion in late June 2006 to the end of December 2006, this well has produced in excess of 24,000 barrels of oil and over 6,700 mcf of gas. The "Isbill #1," in which we had an interest, was drilled. Based on preliminary logs, this well was deemed not to be commercially viable and was plugged and abandoned.
The Isbill #2 well has now been completed and is producing oil and natural gas. Once flow rates from Isbill #2 stabilize, they will be reported. This well was drilled to approximately 5,900 feet and revealed two pay zones of about 25 feet. This well is a direct offset well to the Powell #2 which was drilled and completed previously.
Garvin 2006-3
Delta has entered into an agreement with Ranken Energy Corporation to participate in a five-well drilling program at Garvin and Murray Counties, Oklahoma.
Delta has agreed to take a 10% working interest in this program. This decision was based on the geological information provided to us and on the successes we have already enjoyed working with Ranken on the Owl Creek Prospect. The drilling of the first well is expected to commence in July 2007 and all wells should be drilled within six months of the start date.
The Prospect
The entire Owl Creek Prospect has been totally reinterpreted over the past few months after integrating all the seismic data and the data obtained from the drilling of the Powell #1, the Powell #2 and the Isbill #1. The Drilling of the Isbill #2-36 targeted the Bromide sands, which occur at several levels.
The Owl Creek Prospect has the potential for 11 additional wells on 80-acre spacing or even up to 24 additional wells if placed on 40-acre spacing. In addition to the Trenton zone of the Viola, other wells in the immediate vicinity have seen oil and gas shows in the first Bromide Sand, upper Viola, Hunton, Hart and Gibson zones. Additional drilling will help further define the project potential in these other pay zones.
Pursuant to our agreement, we would be entitled to participate by paying 20% of the drilling costs.
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A previous well at Owl Creek has been producing for several months and allowed the Owl Creek Prospect to be classified as a new discovery in the Trenton zone of the Viola Formation.
This map shows the Lower Gibson Sand Isopach & Viola Time Structure, and identifies the locations of the two re-entry wells at Owl Creek.
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