Delta Petroleum sells non-core assets to Wapiti Oil & Gas for $130 million

July 27th, 2010 - 1:28 am ICT by BNO News  

DENVER (BNO NEWS) — Delta Petroleum Corporation on Monday announced that it has sold various non-core assets for $130 million to Wapiti Oil & Gas, L.L.C.

Delta, an independent oil and gas exploration and development company based in Denver, Colorado, entered into a Purchase and Sale Agreement (PSA) which will include the sale of non-core assets to Wapiti and will include all of Delta’s 31% working interest in the Garden Gulch field of the Piceance Basin in Colorado, all of its working interest in the Baffin Bay field of Texas, all of its interest in Piper Petroleum, half of its working interest in its DJ Basin fields, as well as half of its working interest in the following fields in Texas: Caballos Creek, Choke Canyon, Midway Loop, Newton, and Norian.

In addition, Delta will sell to Wapiti its working interest in its acreage positions in the DJ Basin of Wyoming, Colorado and Nebraska; and other acreage in South Texas. Along with the sale of the working interests, Delta has agreed to allow Wapiti to operate the Newton and Midway Loop fields, as well as the other fields of Texas of which it was the operator.

“This asset sale is an important step for Delta and allows us to continue to reduce our overall leverage and meaningfully strengthen our liquidity position,” Carl Lakey, Delta’s CEO, said. “We will be selling Wapiti our interest in assets that we increasingly considered non-core as we continue to focus on our main asset, the Vega Area, of the Piceance Basin.”

“We believe the assets to be sold in this transaction are not adequately valued by the market as part of Delta, making this sale of non-core assets all the more attractive. The immediate use of proceeds will be to pay down the outstanding balance on our senior credit facility,” he added, as the companies expect to finalize the transaction in August.

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