Delphi Energy Corp. provides the following operations update.

At Bigstone East, the Company's first Montney horizontal well at 1-19-60-22W5M has been successfully drilled to its planned total depth of 5,618 metres with the completion liner set in place across the 2,760 metre "extended-reach" horizontal section of the well. Completion operations consisting of a 20 stage frac program is expected to commence in early January after the drilling rig has been moved to its next Montney location. The drilling operation was completed as planned with the full length of the horizontal section encountering the anticipated reservoir quality rock.

The Company has incorporated into its drilling and completion plans, existing vertical well control including Montney core analysis as well as information available from ten recently drilled horizontal wells offsetting the Company's acreage. The targeted extended-reach horizontal sections are up to twice as long as older horizontal wells and are designed to reduce the number of wells required for full development by up to 50 percent with total project cost savings of approximately 35 percent.

The 1-19 well is immediately offsetting a recently drilled industry competitor's well with a 1,254 metre horizontal length and reported test rates of approximately 4.3 million cubic feet per day of natural gas and 295 barrels per day of condensate. In the Fir area, located approximately three miles to the south of Bigstone East, nine horizontal wells have now been drilled. Test rates reported to date range from 3.5 million cubic feet per day of natural gas and 225 barrels per day of condensate, from a well with a 1,200 metre horizontal length, to a high of 15 million cubic feet per day of natural gas and 750 barrels of condensate, from a well with over 2,500 metres of horizontal length.

The next Bigstone East Montney location at 5-14-60-23W5M is expected to commence drilling during the first week of January. The Company has a drilling inventory of 44 future horizontal Montney locations identified at Bigstone East.

Delphi plans to construct 100 percent owned compression and field gathering infrastructure with initial capacity of 30 mmcf/d in the first quarter of 2012 to connect to existing under-utilized third party infrastructure for transport and final processing at SemCAMS KA and K3 facilities.

At Bigstone West, the 1-33-59-24W5M well is currently drilling in the horizontal section.

Tags: Delphi Energy