DPTR/Bought another 1000 shares before close yesterday and it doing great.Thanks
Columbia River Basin Washington State
Regarding concentrated positions, Canadian Eric Sprott's largest investment is in Delta Petroleum. Some $ 150 million.
Eric's track record is something like 25% compounded return for many years. I started following Delta when Eric in a conference (see below for details) call talked about Delta having potential of being a 40 bagger. That got my attention for DD going.
When someone like Eric says that I set out to determine if it could be true. Well the trigger event for me was Thursday August 17, 2006 when the CEO of Delta spoke at the Enercom Gas & Oil conference spilled the beans. I was patiently waiting for this event. It took over 10 months. I now own high six figures in this. I got the reporter to generate the news story below. The chase is what it is all about.
Below is a summary of where I am today.
Columbia River Basin Multiple Trillion Cubic Feet Natural Gas Potential
Since we are talking about potential of 200-300 Trillion Cubic Feet of natural gas and the ANNUAL U.S. usage of natural gas is about 23 Trillion Cubic Feet you would think there would be more news coverage. Eric Sprott's firm largest natural gas position is in Delta Petroleum.
Encana the operator is trying to keep tight wraps on this. Not sure why. Delta Petroleum has been very open. Delta Petroleum has 20% of the play. Their website is here: deltapetro.com
Target: Columbia River Basin ("CRB") Washington State - The largest unexplored onshore basin in the United States
*****************************************News Story:
Headline in the Yakima Herald Republic Friday August 18, 2006
Sitting On a Gold Mine?
Columbia Basin could hold huge natural gas reserves
by Leah Beth Ward
A Denver-based petroleum company with significant mineral rights in the Columbia Basin says drilling results so far at an exploratory well near Mattawa indicate the region could hold significant reserves of natural gas.
"There are many different estimates out there, but the reality of the situation is this basin, in all likelihood, represents the possibility of being able to prove up in the tens of Tcfs (trillion cubic feet)reserves if not possibly in the hundreds of Tcfs reserves," Roger Parket, chief executive officer of Delta Petroleum said Wednesday at an annual oil and gas industry conference in Denver.
If volumes ever approach those levels, the region would rang among the most productive in the nation, alongside or exceeding such hot spots as the Jonah Field and Green River Basin in Wyoming and the Piceance Basin in Colorado.
Parker's comments were available from a replayed Internet broadcast of the conference.
The Mattawa well described by Parker was drilled by EnCana Oil & Gas USA, a Canadian company with U.S. headquarters in Denver. EnCana has leased 800,000 acres in the basin. Delta has an interest in the Mattawa well and another outside Sunnyside.
In 2002, the United States used about 22.8 Tcf of natural gas, making it one of the world's largest consumers of the fuel, according to the federal Department of Energy. A trillion cubic feet of natural gas can heat 15 million homes for one year.
Dave Donegan, Delta's spokesman, said Thursday that Parker's remarks at the conference could be characterized as cautiously optimistic.
"That's a fair assessment," he said.
Delta is not drilling in the Columbia Basin yet, but Parker said it's planning to start later this year or early next year. The company has leased the mineral rights on about 400,000 acres in the region, which state geologists say is the largest unexplored area within the United States.
Encana has completed one exploratory well, known as the Anderville Farms 1-6 well, on a private farm in the Saddle Mountains east of Mattawa and is nearing completion at a second site eight miles north of Sunnyside in the Rattlesnake Hill. A third well is planned, but
company officials haven't revealed a location yet.
EnCana USA President Jeff Wojahn told analysts last month that the company plans to conduct completion studies in the third quarter of this year, with results known sometime in the fourth quarter.
Completion studies have a strict definition in the natural gas business, explained Bill Lingley, lead geologist with the state Department of Natural Resources. The well operator runs the
equivalent of a pistol down the well casing and shoots holes through the metal into a potential gas zone. If a fluid forms, its likely to be gas condensate, a sign of natural gas.
The plan for completion studies means EnCana is encouraged enough to spend at least another $ 250,000 at the site, said Lingley.
"When I hear completion studies, I perk up. That means the operator is putting his money where his mouth is," he said.
Encana, as is customary in the speculative business of exploration, is not ready to call the venture a success.
Company spokeswoman Wendy Widenbeck said in a telephone interview that it will be sometime next year before it can determine the results of its exploratory program.
If the completion studies are positive, the company will seek permits for delineation wells, which are drilled away from the original location in an efforts to find out how large and prolific
the field might be.
Geologists have believed for some times that the Columbia Basin is rich in hydrocarbons. In the early 1980's, a partnership of Shell and Arco hit a reservoir that showed impressive initial pressure. But drilling technology at the time made further exploration in the region's notoriously stubborn basalt layers too expensive.
Partker, the Delta CEO, referenced the Shell experience in his
remarks.
"The main thing to say about the Columbia River Basin at this point in time, the geologic theory that we've all kind of operated under here for the last couple of years, and really was identified by Shell 25 years ago, has been confirmed, if you will, with another well," Parker said. Parker said, referring to the well near Mattawa.
"We believe we have encountered what we had hoped to encounter prior to drilling the well and we will be very interested to see what actual completion results are as we go into the remaining part of this year." END
Columbia River Basin Multiple TCF's NG --
The key speech happened Thursday August 17, 2006. Appears no one is paying attention. Delta CEO Roger Parker is meeting with analysts today so the story may get out later today.
Target: Columbia River Basin ("CRB") Washington State - The largest unexplored onshore basin in the United States
Industry wisdom: Says the U.S. Pacific Northwest holds trillions of cubic feet of natural gas, waiting to be discovered and produced.
More: Experts have long believed a 125-mile-long and 60-mile-wide patch of land between the Columbia River and Wenatchee -- shaped like a massive footprint -- is rich in natural gas. So rich, in fact, its potential may be similar to the vast supplies of the Western Canadian Sedimentary Basin in Alberta and British Columbia.
Potential: 200 to 300 TCF of natural gas. Each TCF proved is worth approximately $ 1 to $2 Billion in market cap. The potential is substantial !! (since Delta Petroleum owns approximately 20% of the CRB area play and has a market cap of only $ 1 billion this play is
significant to them)
Research report: Ross Smith (highly rated independent Canadian Research firm) on September 11, 2005 released a report on the CRB that estimated 228 TRILLLION cubic feet of natural gas potential in the CRB. Delta has over 20% of the total CRB land acreage tied up. Eric Sprott has said each TCF is worth $ 2 billion of market cap..... ROSS SMITH ENERGY GROUP rseg.com
Players: Shell (been interested in area for 25 years—only recently has technology allowed feasible exploration), Encana and Delta Petroleum (DPTR—owns 20% of acreage in CRB)
DPTR: finance.yahoo.com
Website: deltapetro.com
Eric Sprott founder of Sprott Asset Management has one of the best investment records around (http://tinyurl.com/q9a4b)
Sprott Asset Management's largest investment is Delta Petroleum—owning over $ 150 million worth.
Eric Sprott on two separate occasions said that Delta Petroleum has the potential of a 40 bagger and another occasion stated DPTR has the potential of $800 NAV (DPTR Market price now under $ 18 with market cap of approximately $ 1 billion)
(Listen at 11 minutes 6 seconds Eric Sprott mentions could be 40 bagger (this is early 2005-Delta has expanded play since then to own 20% of the CRB play up from 12%:
events.streamlogics.com
05/auditorium/index.asp )
tinyurl.com $ 800 NAV
Background: There is no natural gas wells in the state of Washington. Zero.
Geologists have long suspected that the Columbia Basin harbors hydrocarbons. The trick has always been a matter of getting past thick layers of basalt to the sedimentary rock below and then finding a large reservoir. Basalt is not only hard but porous, and tends to absorb energy from seismic waves sent underground to detect gas-holding formations.
In 1913, the Conservative Land Investment Co. of Spokane was drilling for water in the Rattlesnake Hills and found gas instead.
The field didn't go into commercial production until 1929. By the time the operation shut down in 1941, the field produced only 1.3 billion cubic feet of gas, paltry by today's standards. Seattle consumes more than that in one day.
But back then it was enough gas to warrant construction of a wooden pipeline to serve Yakima homeowners.
The region's production potential beckoned again in the late 1950s when what was then Standard Oil of California began a test well. But the company soon abandoned the effort and found no oil or gas.
Fast forward to 1984 when a partnership of Shell and Arco hit a reservoir that displayed impressive initial pressure. But the companies quickly encountered obstacles that made it too expensive to continue drilling.
The Shell/Arco well was not enough to extract commercially. Since then the technology has advanced to make it easier, and cheaper, to recover gas from the tight sandstone beds beneath much of southeastern Washington.
In late 2005 Encana as operator joint ventured with Shell and Delta Petroleum began drilling the first 14,000-foot test well, the Anderville Farms 1-6. (note Shell still involved !!)
EnCana's well is only six miles from the Shell/Arco site, which is now capped.
Encana has gone out of its way to keep everything secret and very quiet. They just finished a second well. Encana may be quiet but Delta CEO Parker spilled the beans at the 11th annual Enercom Gas & Oil Conference. Listen to the results disclosed yesterday by Delta
CEO Roger Parker at the Enercom Gas & Oil Conference below. The wells appear to be huge success.
Companies have been snapping up oil and gas leases near where EnCana is drilling. More than 175,000 acres of federal land has been leased in Grant County alone in the past three years, according to Bureau of Land Management records.
*********Delta CEO Roger Parker speech*********************
origin.vcall.com
.htm
Enercom 11th Annual Oil & Gas Confernce
August 16, 2006 1:15pm 15 minutes into presentation DPTR CEO Roger Parker discusses Columbia River Basin
Speech Enercom 11th Annual Oil & Gas Conference Denver August 16, 2006 1:15 pm
Delta Petroleum CEO Roger Parker stammering stated the following regarding the Columbia River Basin drill site approximately 15 minutes into presentation:
" The operator Encana recently reached total depth on the very first
well drilled which was called the Anderville Farms 1-6. Ummm I think
Encana has stated publicly that they expect to go into completion
late in the third quarter........Ugh you know the main thing to say
about the Columbia River Basin I think at this point in time ugh
that the the geologic theory we have operated under for the last
couple years and really was identified by Shell 25 years ago uhg has
ugh ugh if you will, been confirmed by another well. (Pause) We
believe we have encountered what we had hoped prior to drilling the
well and ugh and we will ugh ugh be very interested in the
completion results as we go into the remaining part of this year.
The basin is of course is an undeveloped basin. There are different
estimates out there but the ugh reality of the situation is that
this basin in all likehood represents the possibility of being able
to prove up in the tens of TCF's reserves if not possibly in the
100's of TCF's reserves.....holds multiple TCF for us."
Eric Sprott Background
blumontcapital.com
Eric Sprott is CEO and Chief Investment Officer of Sprott Asset Management Inc.
Eric Sprott has established himself as a clear leader in Canada's investment community. With over 30 years of industry experience, his expertise at making predictions on the market and recognizing investment opportunities with superior growth potential have been proven many times over. His investment abilities are clearly demonstrated by the excellent performance track record of Sprott Managed Accounts, Sprott Canadian Equity Fund and the Sprott Hedge Fund L.P.
More Sprott: tinyurl.com and tinyurl.com
Background on recent CRB government lease bids:
dnr.wa.gov
auctionfiles2005/backgrd_
;wa_st_peto.pdf
The geography of the Columbia River Basin:
dnr.wa.gov
Article and background Mattawa Washington:
tri-cityherald.com
MATTAWA —
Bill Delahoussaye, EnCana 's on-site consultant, can be both poker-faced and ebullient when asked about the prospects for reaching what some have taken to calling "the new black gold."
"With the technology we have and the market right now, this may become a commercially viable project," Delahoussaye says, as if reading from a company script.
But the veteran oil and gas man can't resist the scenario that could turn this rural region into a prolific natural gas field over the next 20 years, similar to now-booming areas in Wyoming, Montana, Colorado and New Mexico.
"I want to retire here," says the 56-year-old Houston resident who, for now, lives on site in a trailer.
Jesse Palacios, Yakima county commissioner from Sunnyside, is rooting for EnCana.
"I hope they are successful. It would mean great things for us," he said.
Delahoussaye (pronounced "della-HOO-see") said Shell used a conventional rig that ran into a problem common to drilling in porous basalt.
Think of the rock formation below the ground as a piece of Swiss cheese. Drilling fluids sent down the hole to help bring up the "cuttings" — mud and rock loosened by the drill bit — like to enter the holes in the cheese. As a result, the cuttings fall on top of the bit, the drill pipe can get stuck and the whole mess is costly and time consuming to fix, Delahoussaye explained.
EnCana specializes in unconventional drilling technology, and it's brought that to bear on the basalt. After starting to drill conventionally last December, the company decided it was going nowhere fast and stopped. Then it ordered a relatively rare type of rig, at least for the natural gas industry, from Lang Exploratory of Salt Lake City. Drilling resumed in August.
Lingley, who has been to the site and is an expert on the geology of the Columbia Basin, called the new rig "amazing. Even for a geek like me, it was pretty cool."
A compressor injects air into a narrow space created by placing a smaller pipe within a larger one. The pressure is a whopping 1,070 cubic feet per minute, which would fill about 144 55-gallon barrels in one minute.
Air under such high pressure takes the path of lease resistance, creating a vacuum. The cuttings are then "vacuumed" up the smaller pipe and out the hole.
The four-man crew working for EnCana is drilling three times as fast as Shell in the 1980s, or about 156 feet a day.
"We're doing much better on time and cost," Delahoussaye said. |
