Delphi
Energy Corp.
TSX:DEE
July 24,
2008
Delphi Energy Announces Closing of Peace
River Arch Acquisition
CALGARY - Delphi Energy Corp. is pleased to report that
it has closed the previously announced acquisition of oil and natural gas
properties producing approximately 650 barrels of oil equivalent per day
(boe/d), predominantly located in the Peace River Arch of northwest Alberta and
northeast British Columbia and directly north of the Company's Hythe area.
The total purchase price, after closing
adjustments, is $37.3 million and includes undeveloped land and seismic with an
estimated value of approximately $5.9 million. All but one minor "right of
first refusal" (ROFR) provisions were waived or allowed to expire by the
third parties holding such rights. The acquisition has primarily been funded by
the Company�s $30.0 million financing, which closed on July 17, 2008, with the
remainder being funded from the Company's credit facilities.
The remaining minor ROFR provision must be either
exercised or allowed to expire by the third party no later than July 28, 2008.
If unexercised or waived, the Company will close on the associated minor
property by July 31, 2008 for approximately $0.8 million.
PROPERTY
ACQUISITION
The
properties are characterized as stable, low decline, high netback production
with an acquisition cost, after closing adjustments, of $49,500 per producing
barrel, primarily weighted towards natural gas (80 percent) on approximately
24,000 net acres of developed land. The Company will acquire approximately 1.2
million boe of proven reserves and 1.6 million of proven plus probable reserves
at an average purchase price of $26.14 per proven boe and $20.15 per proven
plus probable boe, excluding the estimated value of undeveloped land and
seismic. The reserve estimates are in accordance with NI 51-101 with 98 percent
of the reserves classified in the producing category.
The acquisition includes ownership in key natural
gas infrastructure to support future growth from several areas. This
infrastructure includes a 100 percent working interest in the Clayhurst Gas
Plant with capacity of 10.0 million cubic feet per day (mmcf/d), a 5.8 percent
working interest in the Progress Gas Plant with capacity of 142.0 mmcf/d and
ownership in additional field compression and gathering systems throughout the
properties. The Company believes significant development and exploration
potential exists on the 35,000 net acres of undeveloped land (a 39 percent
increase to Delphi's undeveloped land
position) with 292 kilometres of 2D seismic included in the acquisition.
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.
CONTACT INFORMATION:
Delphi
Energy Corp.
David J.
Reid
President
& CEO
(403) 265-6171
or
Delphi
Energy Corp.
Brian
Kohlhammer
V.P.
Finance & CFO
(403)
265-6171
or
Delphi
Energy Corp.
300, 500 -
4 Avenue S.W.
Calgary, Alberta
T2P 2V6
Fax: (403)
265-6207
Email: info@delphienergy.ca
Website: www.delphienergy.ca
This press 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 press release contains forward looking statements and
information relating to the Company�s risk management program, petroleum and
natural gas production, future funds flow from operations, capital programs,
natural gas prices 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.
Although
the Company believes that the expectations reflected in such forward-looking
statements and information are reasonable, it can give no assurance that such
expectations will prove to be correct. Since forward-looking statements and
information address future events and conditions, by their very nature they
involve inherent risks and uncertainties. Actual results may differ materially
from those currently anticipated due to a number of factors and risks. These
include, but are not limited to, the risks associated with the oil and gas
industry in general such as operational risks in development, exploration and
production, delays or changes in plans with respect to exploration or
development projects or capital expenditures, the uncertainty of estimates and
projections relating to production rates, costs and expenses, commodity price
and exchange rate fluctuations, marketing and transportation, environmental
risks, competition, the ability to access sufficient capital from internal and
external sources and changes in tax, royalty and environmental legislation.
Additional information on these and other factors that could affect the
Company�s operations or financial results are included in reports on file with
the applicable securities regulatory authorities and may be accessed through
the SEDAR website (www.sedar.com). The forward-looking statements and
information contained in this press release are made as of the date hereof for
the purpose of providing the readers with the Company�s expectations for the
coming year. The forward-looking statements and information may not be
appropriate for other purposes. Delphi undertakes no obligation to update
publicly or revise any forward-looking statements or information, whether as a
result of new information, future events or otherwise, unless so required by
applicable securities laws.
A barrel of
oil equivalent (boe), derived by converting gas to oil in the ratio of six
thousand cubic feet of gas to one barrel of oil, may be misleading,
particularly if used in isolation. A boe conversion is based on an energy
equivalency conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead.
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