Delphi Energy Reports Continued Montney Drilling Success

Delphi Energy Corp. ("Delphi" or the "Company") (TSX:DEE) is pleased to provide
the following update.


Bigstone Montney Program 

Delphi has now successfully drilled, completed and brought on production six
Montney horizontal wells at East Bigstone. The last three wells were stimulated
utilizing slickwater hybrid frac techniques rather than the smaller conventional
gelled oil frac designs used on the first three wells. The first well completed
with the new frac technique, 15-10-60-23W5, was drilled across one section and
stimulated with 20 stages to limit operational risk. After a successful
completion at 15-10, the Company drilled its next well at 10-27-60-23W5 across
1.5 sections and installed a 30 stage liner. After a successful completion on
the second well, Delphi drilled the third well of the program at 16-23-60-23W5M
across two full sections and has successfully completed it with 30 slickwater
hybrid fracs.  


The recently completed 16-23-60-23W5 well was drilled during the first quarter
of 2013 to a total depth of 5,753 metres with a horizontal lateral length of
2,809 metres. The well was stimulated with a 30 stage slickwater hybrid
completion. The well was brought on production on June 18, 2013 through the
Company's Montney compression and dehy facility and over the first 14 full days
of production, averaged 7.6 million cubic feet per day ("mmcf/d") of raw gas
with associated field condensate production averaging 71 bbls/mmcf of raw gas.
Including plant recovered liquids (estimated to be 35 bbls of C3+ natural gas
liquids per mmcf of raw gas), the average rate over this time period is
estimated to be 1,943 boe/d. Total liquids production over this period
contributed 810 bbls/d, 75 percent of which is field and plant recovered
condensate. The well has recovered approximately 25 percent of the initial load
frac water volumes to date. Current total production from the well is consistent
with the 14 day average with a current field produced condensate to gas ratio of
62 bbls/mmcf raw gas. 


The previously released cumulative revenue plot comparing the relative cash
generating capability of the new wells to the first three wells has been updated
and continues to demonstrate a significant step change in performance. The 10-27
well that was brought on-stream in early March is expected to payout in November
of this year, an 8 month payout. 


The current production rate (boe/d) from 10-27 (after 86 days of production) and
15-10 (after 104 days) are now 3.1 and 1.7 times better respectively than the
average rate of the first three wells at the same time period.


To view the Delphi Energy - East Bigstone Horizontal Montney Wells Cumulative
Revenue, please visit the following link:
http://media3.marketwire.com/docs/n702dee1.pdf.


Initial results of the 15-10, 10-27 and 16-23 wells continue to surpass the
Company's expectations. As a result of the new completion technique employed,
the three new wells are exhibiting shallower initial declines than the Company's
first three wells drilled in East Bigstone (which were completed with gelled oil
fracs). The 10-27 and 16-23 wells stimulated with 30 stages are exhibiting
similar early time production performance characteristics, exceeding the
Company's type curve assumptions. In addition, the new wells are also producing
at higher field condensate to gas ratios compared to the first three wells. 


The Company plans to drill an additional three wells in East Bigstone prior to
the end of 2013, with two of the three wells scheduled to be completed and on
production by year-end. In what is expected to be a continuous one rig drilling
program with up to eight wells in 2014, plans are to add a second rig to the
program in the latter part of 2014.  


The evolution of Delphi's drilling and completion plan to an extended-reach
horizontal wellbore drilled across two sections and stimulated using a 30-stage
frac design also enhances the economics of the project. When taking into
consideration the incremental royalty credits earned by drilling across the
second section and the incremental costs, Delphi is effectively developing the
second section at minimal cost. Relative to general industry Montney drilling
activity, one of Delphi's extended-reach wells is equivalent to two industry
type wells. 


In addition, the Company expects to commence drilling operations on the South
Bigstone strat test and horizontal Montney well within the next month as part of
the previously announced industry farm-in whereby Delphi will earn a 75 percent
working interest in 32.5 sections of Montney lands. The well with a surface
located at 5-8-59-22W5M will be completed, equipped and pipeline connected in
2014 as part of the planned 15 kilometre pipeline expansion from the 7-11 Delphi
owned facility to the 5-8 wellsite.


Funding 

In addition to cash flow to fund the capital program, the Company has recently
entered into two arrangements to further support the 2013 and 2014 planned
capital programs. 


Delphi has entered into a Joint Venture Agreement on four Montney wells in East
Bigstone. The Joint Venture Partner ("Partner") will contribute $2.5 million per
well for a total of $10.0 million towards the Company's 2013 Montney capital
program. In exchange for the capital contribution, the Partner will receive a 10
percent Gross Overriding Royalty ("GOR") on the Company's working interest
revenue on the well until payout of the capital contribution. After payout the
GOR will be reduced to 7.5 percent until a required rate of return is achieved
on the pooled funds, at which time the GOR will be extinguished on all four
wells. The Company has expressed interest in a similar arrangement with the
Partner for the Company's 2014 Montney capital program at East Bigstone. 


The Company has also entered into a commitment letter for $20.0 million with a
leading Canadian energy and resource lender. The funding will be available in
two tranches; $12.0 million available to be drawn down until July 15, 2013 and
$8.0 million available for draw down until September 16, 2013. The debt will be
secured by the Company's assets and be subordinate to the Company's senior
credit facility, have a term of 18 months and be extendible at the option of
Delphi for an additional six months. The subordinated debt will have an annual
coupon rate of 8.5 percent with interest payable monthly. The parties are
preparing final documentation with closing of the financing expected no later
than July 12, 2013.


Outlook 

Delphi has successfully grown the Bigstone Montney land base from four sections
to 108 sections in a relatively short period of time. The Company continues to
pursue additional consolidation opportunities in the Bigstone/Fir area
leveraging off of its control of critical infrastructure and advanced
understanding of the Montney play in the area. 


The refined drilling and completion techniques utilized on our recent wells have
delivered a step change in the economics of the Montney play in the area which
is positioning the Company for long term self-funded growth. The Company now has
a current project inventory that will provide economic growth beyond a 10-year
horizon.


As previously communicated, Delphi's 5-year growth plan contemplates production
growth to 20,000 boe/d by 2017, with targeted annual production per share growth
of 25 percent and annual cash flow per share growth of 45 percent. Capital
spending over the next five years to achieve that result under the plan is
projected to be $560 million funded 90 percent from cash flow to drill 50
Montney horizontal wells and fund the expansion of Delphi's 100 percent owned
facility. 


The production profile of the new wells, with lower initial declines and greater
condensate yields resulting in materially greater present value of the reserves
and significantly reduced payout times, is expected to have a favourable impact
to the Company's cash generating capability and underlying asset value. The
Company forecasts second half 2013 production to average 8,600 to 9,000 boe/d, a
16 percent increase from the first half of 2013. 


Delphi continues to explore additional options to further accelerate its Montney
drilling program, through additional non-core asset dispositions and joint
venture relationships and alternate non-dilutive financing structures. 


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. 


As per CSA Staff Notice 51-327 initial production and initial production test
results should be considered preliminary data and such data is not necessarily
indicative of long-term performance or of ultimate recovery. 


Non-IFRS Measures. The release contains the terms "funds from operations",
"funds from operations per share", "net debt", "cash operating costs" and
"netbacks" which are not recognized measures under IFRS. 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-IFRS measure and has been defined by the
Company as net earnings plus the add back of non-cash items (depletion and
depletion, accretion, stock-based compensation, deferred income taxes and
unrealized gain/(loss) on financial instruments) and excludes the change in
non-cash working capital related to operating activities and expenditures on
decommissioning obligations. 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 IFRS. The Company has defined net debt as the sum
of long term debt plus/minus working capital excluding the current portion of
deferred income taxes and fair value of financial instruments. 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 expense, general and administrative expenses and cash finance
costs.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Delphi Energy Corp.
David J. Reid
President & CEO
(403) 265-6171
(403) 265-6207 (FAX)


Delphi Energy Corp.
Brian P. Kohlhammer
Senior V.P. Finance & CFO
(403) 265-6171
(403) 265-6207 (FAX)


Delphi Energy Corp.
300, 500 - 4 Avenue S.W.
Calgary, Alberta T2P 2V6
(403) 265-6171
(403) 265-6207 (FAX)
info@delphienergy.ca
www.delphienergy.ca
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