By OGJ editors
HOUSTON, Feb. 1 -- Denver firms Delta Petroleum Corp. and Armstrong Resources LLC will begin exploratory drilling in the Central Utah thrust belt in the second quarter.
Delta plans to acquire a 65% working interest in 88,000 acres held by Armstrong in the Hingeline play, established in 2004 with the discovery of Covenant field (see map, OGJ, Jan. 17, 2005, p. 42).
Covenant field, the Hingeline's first commercial discovery, is widely considered to be capable of yielding 1 billion bbl of oil, Delta said.
Delta said, "Thrust belt discoveries such as this tend to occur in a trend with other productive structures. Delta's new land position is on trend with Covenant and is believed to contain numerous undrilled four-way closures, which appear to be the same size or larger than the Covenant field."
Delta will pay Armstrong $24 million in cash and 673,000 shares of common stock. Armstrong retains 35% working interest. Delta will operate most of the acreage and will pay drilling costs for the first three wells.
