Delta Oil and Gas, Inc. previously reported that its Donner #1 Well, located in Newton County, Texas was drilled to a total depth of 7,600 feet on June 4, 2010 and flowed at rates as high as 192 barrels of oil per day ('bopd') during the initial test. Since that time, the test period has ended and the well has been tied in to a new battery facility owned by the Company and its Partners. The well is now on full production flowing naturally on a 4.5/64th choke at the restricted rate of 41 bopd at a relatively constant flowing pressure of 980 PSI. The well appears capable of daily production in excess of what is currently being produced. Once we are comfortable that production stability has been achieved, the Company and its partners may increase production to the 60 to 65 bopd range with a view to further increases as is deemed sustainable. The total production for the last 16 days of August 2010 was 665 barrels of high quality light gravity oil with zero water produced. Sales of this oil began immediately following tie-in in mid August.

A complete suite of logs run on the well indicated approximately 13 feet of oil pay with an average porosity of 30%. The Company's reservoir Engineer and Geologist calculate the area of closure to cover approximately 70 acres. The Company and its partners are required by the terms of the lease to commence drilling on the second well on the lease within 6 months of completing the Donner #1 well and as such, the Company has instructed its Consultants to set a location for the next well based on the 3-D Seismic and the success of Donner #1. We expect drilling to commence immediately following permitting. The Company is also evaluating the wisdom of opening up significant reserves within the Company's acreage with a horizontal leg.

The Texas project contemplates the drilling of up to three wells in the Newton County area. Once the exact location and timing of the drilling of the second well is confirmed, the Company will provide further updates. Delta owns a 40% gross working interest before pay out in the wells covered by this drilling program and at present, has fully paid the drilling and completion costs associated with the Donner #1.

Tags: Delta Oil & Gas