CALGARY, ALBERTA -- (Marketwired) -- 09/10/13 -- Delphi Energy Corp. ("Delphi" or the "Company") (TSX: DEE) is pleased to provide the following update.
Delphi has entered into a farm-in agreement to earn a 100 percent working interest in up to ten sections of Montney petroleum and natural gas rights in its core area at Bigstone, Alberta.
The farm-in contemplates Delphi drilling one horizontal earning well in the Montney formation at Bigstone to earn the first block. The earning well will be one of the three wells the Company has planned to drill prior to December 31, 2013, thus no incremental spending above the planned 2013 capital program is required to earn under the farm-in. Upon successful tie-in for production or abandonment of the earning well, Delphi will earn a 100 percent working interest in a pre-selected five section block of the farm-in lands in East Bigstone. Delphi will reserve the farmor of the lands a 3.5 percent non-convertible gross overriding royalty in both the earning well and the earned farm-in lands.
Delphi also retains an option to drill an additional horizontal Montney well, on or before April 22, 2016, at a location of its choice on the farm-in lands. Upon successful tie-in for production or abandonment of the option well, Delphi will earn a 100 percent working interest in the second five section block of lands, reserving an equal non-convertible gross overriding royalty to the farmor on these farm-in lands.
The farm-in has several key benefits to Delphi:
-- Upon full earning, the Company will increase its land position in the Bigstone Montney play from 93 net (108 gross) sections to 103 net (118 gross) sections;-- The Company's inventory of East Bigstone low-risk development drilling increases by up to 20 locations to 160 net potential two-mile horizontal drilling locations;-- The Company anticipates the assignment of reserves on certain of the farm-in lands which immediately offset existing producing wells; and-- The farm-in does not impact Delphi's 2013 capital expenditures and will be accomplished within the planned second half spending of 2013 as previously disclosed.
Delphi's most recent three wells completed with a slickwater hybrid fracture stimulation continue to outperform the Company's expectations and as a result the Company continues to successfully pursue consolidation opportunities in the greater Bigstone area.
Delphi Energy is a Calgary-based company that explores, develops and produces oil and natural gas in Western Canada. The Company is managed by a proven technical team. Delphi trades on the Toronto Stock Exchange under the symbol DEE.
Forward-Looking Statements. This release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", may", "will", "should", believe", "intends", "forecast", "plans", "guidance" and similar expressions are intended to identify forward-looking statements or information.
More particularly and without limitation, this management discussion and analysis contains forward looking statements and information relating to the Company's risk management program, petroleum and natural gas production, future funds from operations, capital programs, commodity prices, costs and debt levels. The forward-looking statements and information are based on certain key expectations and assumptions made by Delphi, including expectations and assumptions relating to prevailing commodity prices and exchange rates, applicable royalty rates and tax laws, future well production rates, the performance of existing wells, the success of drilling new wells, the capital availability to undertake planned activities and the availability and cost of labour and services.