Stock Picks: Delphi Energy (TSE:DEE)

Delphi Energy Corp. is engaged in the acquisition, exploration for and development and production of crude oil, natural gas and natural gas liquids from properties located in Western Canada. Its operations are principally concentrated in North West Alberta.

Quick Facts (Q3 2010):

Production: 8,114 boed, 81% natural gas

O/S: 120.5 million FD (management ownership 7.2%)

Debt: 107.9 million (debt to cf 1.8x)

Undeveloped Land: 223k net acres

Q3 Quarterly Highlights

Q3 production:  averaged 8114 boe/d +20% Y-Y.

Q3 operating costs:  $7.45 per boe, compared to $9.46 per boe in Q3 of 2009 and $8.71 per boe in Q1 of 2010.


2010 production guidance:  9000+ boe/d exit rate.

43% of natural gas production locked in at $6.16/mcf for the remainder of 2010.

20% of 2011 natural gas production hedged at $6+/mcf.

The Company is targeting a further 5-10% reduction in operating costs over the next year.

DEE is focusing on its key oil and liquid-rich gas plays at Bigstone (17 net sections of Cardium), Hythe and Wapiti (50-100 bbl/MMcf).

7 gross wells to be completed and placed on production in Q4.


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