CALGARY, ALBERTA -- (Marketwire) -- 03/26/13 -- Delphi Energy Corp. ("Delphi" or the "Company") (TSX: DEE) is pleased to announce the closing of a strategic land acquisition in the heart of its Bigstone Montney acreage. Levering off of the positive results of our last five successful Montney wells in the area (the two most recent of which were detailed in Delphi's March 20, 2013 press release) the Company has acquired an additional 30 gross (26.8 net) sections of Montney rights directly offsetting our existing acreage and wells (the "Acquisition"). The land was acquired for a purchase price of $13.65 million ($796 per acre) and fills in the gap between the Company's existing lands in East and West Bigstone and Montney lands to the south of Bigstone East acquired pursuant to our previously announced farm-in (the "Previous Farm-in") (detailed in our December 12, 2012 press release).
The Acquisition has several key benefits to Delphi:
-- The Company's land position in the Bigstone Montney play (subsequent to the potential full earning of the Previous Farm-in) grows by 40 percent to 108 gross (93 net) sections from 78 gross (66.2 net).-- An independent evaluation report effective February 1, 2013 and prepared by Seaton-Jordan & Associates Ltd. assigned a "fair value" to the acquired lands of $26.95 million.-- The Company's inventory of drilling locations in the Bigstone Montney play increases by 54 locations or 40 percent to 140 net potential two- mile horizontal drilling locations.-- The Company anticipates the assignment of reserves on certain of the Acquisition lands immediately offsetting existing producing wells.-- Significantly enhances the efficiency of future capital spending related to infrastructure and development drilling due to a very large contiguous land base.
To view an image of the Existing Montney Horizontal Wells, please visit the following link: http://media3.marketwire.com/docs/n326dee1.pdf.
The Acquisition is strategic as it puts the final large piece of the Bigstone Montney project in place for Delphi creating one of the largest land positions in the area. Delphi's project area now has an estimated drilling inventory totaling over $1.2 billion of capital for full development.
Delphi's previously reported 15-10-60-23W5 Montney horizontal well was drilled from a surface location of 16-3-60-23W5 located directly on the new Acquisition lands and is pipeline connected to the Company's 100 percent owned compression and dehydration facility. This 16-3 surface location will be used for pad drilling where additional horizontal wells will be drilled south on the Acquisition lands.
The Company estimates up to 2.5 net undeveloped locations, of the 54 net locations identified, could be immediately added to the reserve report due to proximity of existing well control and production. This would add approximately $18 million of total proved plus probable ("P+P") reserve value, discounted at 10 percent, based on the average before tax net present value of the Company's P+P undeveloped Montney locations in the 2012 year end GLJ Petroleum Consultants Ltd. reserve report.