* Co had warned of covenant default in January 2011
* Sees H2 production of 6.9-7.2 bcfe
BANGALORE Aug 10 Independent oil and gas
company Delta Petroleum Corp DPTR.O Tuesday said it is in
talks with prospective lenders for a larger senior credit
facility and expects to reach an agreement by the third quarter
In a filing with the U.S. Securities and Exchange
Commission on Monday, Delta warned it does not expect to have
the liquidity to repay the borrowings under its credit facility
due on Jan. 15, unless it completes a refinancing of the
existing credit facility prior to that date.
"With the closing of the transaction and the resulting
improved liquidity created for Delta, the company will now
focus its efforts on operational improvements of the companies'
core oil and gas assets," Chief Executive Carl Lakey said on a
conference call on Tuesday
Delta said it will spend about $28 million of its full-year
capital budget on completing 15 previously drilled wells in the
Vega region, in the second half of the year.
The company was compliant with its covenants at the end of
the second quarter and expects to remain in full compliance for
the remainder of the year, Delta said on the call.
Shares of the company, which dropped as much as 7 percent
to 78 cents in morning trade, recouped some of its losses to
trade down 3 percent at 81 cents Tuesday afternoon on Nasdaq.
On Nov 30, Delta, whose core areas of operations are the
Rocky Mountain and Gulf Coast regions, said it is exploring
strategic alternatives, including a possible sale of the
As part of its plan to evaluate strategic options, Delta
agreed in July to sell various non-core assets to privately
held Wapiti Oil & Gas LLC for $130 million, to repay some debt.
The company now expects production of 6.9 billion cubic
feet equivalent (bcfe) to 7.2 bcfe in the second half of the
year, after accounting for the sale of assets to Wapiti.
(Reporting by Antonita Madonna Devotta in Bangalore; Editing
by Gopakumar Warrier)