Let's talk about Delhi in particular. The improvements there are quite numerous. Over the last year, production response for the first 2 phases came on sooner than expected. Production grew more rapidly than expected, and the project has actually required less CO2 than projected. We also benefited from higher oil prices, especially since the first of the calendar year '11 due to the substantial premium that our Delhi oil received compared to NYMEX WTI oil price. The oil we sell at Delhi is tied to Louisiana Light Sweet price, which tracks Brent or imported oil. And that premium to WTI was more than $12 a barrel in the fourth fiscal quarter or about 12%, and then actually that premium has increased through the near term. In fact, our most recent realized oil price at Delhi is substantially higher than the oil prices utilized in our SEC reserves report and in our forward oil price curve evaluation. As a result of these various factors and the continued substantial investment during the past year by the operator, our independent reserve engineers calculated that the reversionary working interest payout has accelerated to calendar 2013 year end. That is more than 2 years earlier than projected in last year's report. At payout, our net revenue interest at Delhi increases from the current 7.4% to about 26.5%, and we would bear at that time a 24% working interest share of operating costs and future capital expenditures. Due to the accelerated payout date, we now projected -- that should bear our 24% share capital expenditures beginning in 2014, which will include the last phase of the proved reserves development. But our share of capital expenditures will still be far less than our net operating cash flow from Delhi that same year.
Evolution Petroleum's CEO Discusses Q4 2011 Results - Earnings Call Transcript
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