By Denver Business Journal

Delta Petroleum Corp. -- which earlier this month had a major planned asset sale fall through -- said Monday it has reached a new deal to sell off another package of assets for $130 million to pay down debt.

The Denver oil and gas company (NASDAQ: DPTR) said it has reached agreement with Wapiti Oil & Gas LLC to sell various "non-core assets." The deal is expected to close next month, Delta said.

The positions to be sold as described by the company are:

â¿¢ All of Delta's 31 percent working interest in the Garden Gulch field of the Piceance Basin in western Colorado;

â¿¢ All of its working interest in the Baffin Bay field of Texas;

â¿¢ All of its interest in Piper Petroleum;

â¿¢ Half of its working interest in its DJ Basin fields;

â¿¢ Half of its working interest in the Caballos Creek, Choke Canyon, Midway Loop, Newton and Norian fields in Texas;

â¿¢ Its working interest in its acreage positions in the DJ Basin of Wyoming, Colorado and Nebraska;

â¿¢ Other acreage in south Texas.

Also, the deal calls for Wapiti to operate the Newton and Midway Loop fields as well as the other fields of Texas of which Delta 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, who was appointed Delta's CEO earlier this month, said in a statement.

"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," Lakey said. "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."

Delta said that when the sale to Wapiti closes, its borrowing base under its senior credit facility will be reduced to $35 million, but the company will be allowed up to $28 million in capital expenditures for the third and fourth quarter of 2010.

Delta stock, which has slid from about $20 a share two years ago to 80 cents at Friday's close, was trading higher early Monday on news of the pending sale.

Delta announced in March that it had entered into a non-binding letter of intent with Opon International LLC of Denver to sell a 37.5 percent non-operated working interest in Deltaâ¿¿s Vega Area assets for $400 million, of which about $225 million would be spent to develop the field.

But on July 7, Delta said it had terminated the deal, saying Opon was unable to obtain financing for the transaction. Delta said then it would continue to develop the Vega area on its own.

Copyright 2010 American City Business Journals

Copyright 2010