First Alabany came out with a buy on Delta today. Read a portion of what they said:
Regarding: Delta Petroleum DPTR
(My Note if you don't believe in Eric Sprott's $ 800 potential (he has over $120 million invested in Delta) how about the analyst report that came out today First Albany at $ 175?)
From attached analyst report First Albany:
Two World-Class Prospects Expose Investors to $175 per share in Potential Asset Value; Initial Results Anticipated in Next 3-6 Months
In the CRB, the Anderville Farms 1-6 (7.5% WI) has been drilled and logged. At its analyst meeting, management described the log results as "better in some ways than anticipated." Completion is anticipated in the next 30-60 days. The second well in the basin, the Anderson 11-5 (7.5% WI) has spud, and Delta recently announced it has begun permitting two Delta-operated locations (100% WI). Delta's partners in the first phase of the play are EnCana and Shell (RDS-$72.03-Not Rated ).
We consider this play to be the highest potential natural gas resource play being evaluated in North America.
The CRB boasts the potential for a thicker pay section (1,000' versus 600' ) and better permeability (3 millidarcies versus 0.1) than the Pinedale and has similar pressures (0.8 psi). One of the original wells drilled in the basin in the early 1980s, the Shell BN 1-9, was completed in two sands that IP'd at 17 MMcfe/d and settled in at 5 MMcfe/d over an extended (62 days) production test. Other wells in the basin had mixed results, but the primary challenge was completing in multiple sands to increase production rates and unlock the economic potential of the rock. Delta and its partners believe the multi-stage completion technology that transformed the Pinedale into a world-class
play could have similar effect in the CRB.
A thick layer of basalt overlays the play from 8000-11,000'. The underlying sedimentary layers total 3000-9000'. Delta and its partner have been using a closed system "mining" rig to penetrate the basalt, which allows them to avoid circulation issues and mud flow into fresh water aquifers. Drilling on the first modern well in the basin, the EnCana-operated Anderville Farms 1-6 was challenging, but the second well has drilled twice as fast to date. Delta projects it should be able to drill at a rate of 200' a day through the basalt and 400' a day through the sediment for a total drilling time of 105 days on average (60 days through basalt and 45 days through sediment). |
