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Press release from Marketwire

Delphi Energy Kicks Off Second Half 2011 Drilling Program

Monday, June 20, 2011

Delphi Energy Kicks Off Second Half 2011 Drilling Program09:57 EDT Monday, June 20, 2011CALGARY, ALBERTA--(Marketwire - June 20, 2011) - Delphi Energy Corp. (TSX:DEE) ("Delphi" or "the Company") is pleased to announce it has commenced drilling operations as part of its summer drilling program.Delphi has moved three drilling rigs into its operating areas in the Deep Basin of North West Alberta to kick off its $40 million second half 2011 capital program, drilling approximately 12 gross (9.2 net) wells. The drilling program is primarily focused on multi-zone vertical wells targeting liquids-rich natural gas in the Nikanassin and shallower Cretaceous intervals in the Wapiti area. The first of two rigs has commenced drilling in Wapiti as part of an eight well program with a second rig expected to move into the area within the next two weeks. In the Hythe area, the Company currently has two drilling rigs operating. The first rig is drilling a horizontal well targeting light oil in the Doe Creek formation, where Delphi has drilled 12 wells over the past two years. The second rig is drilling a horizontal well targeting natural gas in the Falher formation as the Company continues to advance its plan to improve the efficiency of the existing natural gas liquids ("NGL") recovery system at its processing facility. It is anticipated that the liquids recovery will increase NGL production in the Hythe area from five barrels per million cubic feet to 20 to 25 barrels per million cubic feet. The Company anticipates the liquids recovery upgrade will be operational sometime in the first quarter of 2012.At Bigstone, the Company anticipates drilling two (1.0 net) horizontal Cardium oil wells during the fourth quarter. With industry activity and positive results offsetting the Company's Montney acreage, preliminary surveying operations, with a contemplated winter spud date, have commenced on its first Montney horizontal well targeting liquids-rich natural gas Delphi anticipates second quarter production will be between 9,000 and 9,200 boe/d up from 8,259 boe/d in the first quarter. Light oil and natural gas liquids production is forecast to increase to approximately 27 percent of production. Delphi continues to forecast average production for the year of 8,800 to 9,200 boe/d, an increase of 12 percent compared to 2010.The Company also announces that Michael Kaluza has resigned as chief operating officer of the Company to pursue another career opportunity. The Board of Directors wishes to express their gratitude and thanks to Mr. Kaluza for his six and one-half years of service to the company.Delphi Energy is a Calgary-based company that explores, develops and produces oil and natural gas in Western Canada. The Company is managed by a proven technical team. Delphi trades on the Toronto Stock Exchange under the symbol DEE.Forward-Looking Statements. This management discussion and analysis contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", may", "will", "should", believe", "intends", "forecast", "plans", "guidance" and similar expressions are intended to identify forward-looking statements or information.More particularly and without limitation, this management discussion and analysis contains forward looking statements and information relating to the Company's risk management program, petroleum and natural gas production, future funds from operations, capital programs, commodity prices, costs and debt levels. The forward-looking statements and information are based on certain key expectations and assumptions made by Delphi, including expectations and assumptions relating to prevailing commodity prices and exchange rates, applicable royalty rates and tax laws, future well production rates, the performance of existing wells, the success of drilling new wells, the capital availability to undertake planned activities and the availability and cost of labour and services.Although the Company believes that the expectations reflected in such forward-looking statements and information are reasonable, it can give no assurance that such expectations will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, the uncertainty of estimates and projections relating to production rates, costs and expenses, commodity price and exchange rate fluctuations, marketing and transportation, environmental risks, competition, the ability to access sufficient capital from internal and external sources and changes in tax, royalty and environmental legislation. Additional information on these and other factors that could affect the Company's operations or financial results are included in reports on file with the applicable securities regulatory authorities and may be accessed through the SEDAR website ( www.sedar.com ). The forward-looking statements and information contained in this press release are made as of the date hereof for the purpose of providing the readers with the Company's expectations for the coming year. The forward-looking statements and information may not be appropriate for other purposes. Delphi undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.Basis of Presentation. For the purpose of reporting production information, reserves and calculating unit prices and costs, natural gas volumes have been converted to a barrel of oil equivalent (boe) using six thousand cubic feet equal to one barrel. A boe conversion ratio of 6:1 is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. This conversion conforms with the Canadian Securities Administrators' National Instrument 51-101 when boes are disclosed. Boes may be misleading, particularly if used in isolation.Non-GAAP Measures. The MD&A contains the terms "funds from operations", "funds from operations per share", "net debt", "cash operating costs" and "netbacks" which are not recognized measures under Canadian generally accepted accounting principles. The Company uses these measures to help evaluate its performance. Management considers netbacks an important measure as it demonstrates its profitability relative to current commodity prices.Management uses funds from operations to analyze performance and considers it a key measure as it demonstrates the Company's ability to generate the cash necessary to fund future capital investments and to repay debt. Funds from operations is a non-GAAP measure and has been defined by the Company as net earnings plus the addback of non-cash items (depletion, depreciation and accretion, stock-based compensation, future income taxes and unrealized gain/(loss) on risk management activities) and excludes the change in non-cash working capital related to operating activities and expenditures on asset retirement obligations and reclamation.The Company also presents funds from operations per share whereby amounts per share are calculated using weighted average shares outstanding consistent with the calculation of earnings per share. Delphi's determination of funds from operations may not be comparable to that reported by other companies nor should it be viewed as an alternative to cash flow from operating activities, net earnings or other measures of financial performance calculated in accordance with Canadian GAAP. The Company has defined net debt as the sum of long term debt plus working capital excluding the current portion of future income taxes and risk management asset/liability. Net debt is used by management to monitor remaining availability under its credit facilities. Cash operating costs have been defined as the sum of operating expenses, transportation expenses, general and administrative expenses and interest costs. Operating netbacks have been defined as revenue less royalties, transportation and operating costs. Cash flow netbacks have been defined as operating netbacks less interest and general and administrative costs. Netbacks are generally discussed and presented on a per boe basis.FOR FURTHER INFORMATION PLEASE CONTACT: David J. ReidDelphi Energy Corp.President & CEO(403) 265-6171(403) 265-6207 (FAX)ORBrian KohlhammerDelphi Energy Corp.V.P. Finance & CFO(403) 265-6171(403) 265-6207 (FAX)OR300, 500 - 4 Avenue S.W.Delphi Energy Corp.Calgary, Alberta T2P 2V6info@delphienergy.cawww.delphienergy.ca