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Wordsworth
In May 2006, Delta Oil & Gas entered into a farm-in agreement with Texalta Petroleum Ltd., a well-established operator in southeast Saskatchewan, Canada. The company has agreed to participate for 15% before payout and 7.5% after payout in the first of a proposed four-well horizontal oil drilling program in the Wordsworth area. Thereafter, each additional well earns a 15% working interest.
This area is known for prolific oil reserves in numerous Mississippian Alida pools where horizontal wells can prove initial production rates up to 500 barrels of oil per day. Payout of one well investment of approximately $1 million could be only a few months, with up to 10 years of additional production life still remaining.
In June 2006, the first well was drilled to a total horizontal depth of 6,670 feet. The drilling resulted in an extraordinary discovery for the company: a new Alida oil pool at East Wordsworth, initially producing the equivalent of 456 barrels of oil per day.
The well was completed as a flowing oil well and has been producing in the range of 200 barrels of oil per day and between 50,000 and 100,000 cubic feet of natural gas per day from a pay zone estimated to be approximately 900 feet.
A second horizontal well was drilled in May 2007. Initial logs indicated hyrdrocarbon showings in an oil-bearing zone estimated to be approximately 770 feet in the horizontal section. However, due to high water content, the operator determined that it was not commercially viable and will be abandoned.
The operator has indicated that based on the success to date, it expects to drill one additional well every quarter for the next year. Delta owns a 15% working interest in all additional wells to be drilled in this area.
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