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TODD CREEK
Delta Oil & Gas has acquired a 20% interest in 13.75 sections of land encompassing 8,800 gross acres in Todd Creek.
The natural gas produced is sweet gas, with no sulphur or CO2, providing significantly reduced processing costs and increased output. Sweet gas generates the highest prices on the market.
The potential exists to drill up to 2 wells per section, which could total 20 to 25 wells over the next 3 years.
The company has also acquired an interest in a previously drilled well located at 7-16-9-2W5 in November 2004. Initial well data looks very promising, with a depth of 1600 meters. Although the well has not been tested, initial logs indicate that a potential gas zone has been located at a traditionally strong depth. Our geologists have further identified a potentially prolific, deeper gas zone. Deeper wells generally have a much longer life cycle than shallow wells. Production potential of this zone is one Million or more Mcf a day (180 boe plus per day). The company plans to deepen the 7-16 well to test this zone.
In addition, there exists the potential to produce from both the upper zone and the lower zone at the same time, thus increasing payback.
In May, 2005 the company commenced drilling on a second location of the property. The well is located in 13-28-9-2W5 which is 500 meters south of the discovery well at 6-33-9-2W5. Drilling was completed in June 2005. In November 2005, Delta completed testing, and the well has been classified as a new natural gas discovery. Log analysis shows that the well has intersected two gas formations with a combined net pay of over 80 feet. Preliminary natural gas reserve estimates for this well exceed 700 Million Cubic Feet (Mcf) of gas.
Our second well at Todd Creek (the “13-33”) was spudded on December 31, 2006 and drilling to the targeted depth of 5,500 feet. This well was completed in January 2007. The geological zone targeted at this depth is known as the Cadomin formation. The Cadomin is a sandstone-conglomerate that sometimes exists as a thick alluvial fan up to 65 feet in thickness and could be spread out for several miles deep in the basin up to 15,000 feet. This well is located very close to the Gas Processing facility so its production is tied into the processing plant.
Production facility
Another benefit of the Todd Creek area is the existence of a natural gas production facility on the property. Construction was completed on a gas processing plant just south of its Todd Creek well located at 13-28-9-2W5. The gas plant is capable of accommodating 10 Million Cubic Feet of gas per day with significant expansion capabilities. While Delta will have no direct interest in the plant, the immediate access to market for its anticipated production from the area is of substantial benefit.
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One of the benefits of the Todd Creek area is the existence of an active natural gas production facility on the property. An export pipeline to the US runs directly across the Todd creek property, keeping tie-in costs exceptionally low.
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