Time is fast running out for Delta Petroleum (Nasdaq: DPTR). With its stock currently trading at around $0.50, a massive gulf sits between it and the $1.00 price required for a continued Nasdaq listing. The company, which has until Aug. 8 to regain compliance with Nasdaq's listing rules, does not seem anywhere close to the required mark.

The big problem
According to Nasdaq's rules, to regain compliance, the closing bid price of the company's common stock "must meet or exceed $1.00 per share for a minimum of ten consecutive business days during the 180 day grace period" (which is due to end Aug. 8). Delta's stock did witness a brief surge when it closed above $1 for eight consecutive days in the first week of March. However, the momentum didn't last. Foolish investors should definitely sit up and take note.

Of course, what happens should a delisting take place is anybody's guess. Delisting would likely cause the share price to slide more. An enlistment in over-the-counter (OTC) exchanges as a penny stock would mean huge volatility, lower compliance standards, and higher risks in trading for investors.

From the company's perspective, management's effectiveness will definitely come under scrutiny since they can't appear to meet this rather low bar. In other words, Delta Petroleum is definitely not the type of stock for newbie investors.

Given the weak fundamentals of this company, a delisting wouldn't really come as a surprise. The first quarter of the year saw a further drop in production volumes, despite the company's implementing cost-cutting measures by divesting noncore assets.

This is clearly not the best way to pay off debts under its credit facility, but surprisingly, the sell-off hampered production as well. Production dropped 16% as a result, compared to the first quarter of 2010.

Still a lot of promise ...
A positive development has been growth in revenues over the previous year. Management is definitely trying to script a turnaround. The company's core assets in the Vega area, which total about 22,375 acres, contain approximately 84% of the company's proved reserves.

Cash flow from operations also turned positive after four consecutive quarters in the red. While this does not mean much, the signs are encouraging. Even though delisting creates serious problems, on a fundamental basis, Delta's future shows more promise than that of Hyperdynamics (NYSE: HDY), for example, whose fundamentals are anything but impressive.

Delta's strategy to streamline its operations by concentrating on the Vega area seems logical. With 122 Bcf of proved gas reserves (representing 91% of its total proved reserves), there definitely is potential for a brighter future. With natural gas showing signs of being the next biggest trend in commodity plays, Delta might have what it takes to grow, provided it can remain afloat in the immediate future.

Fool contributor Isac Simon does not own shares of any of the companies mentioned in this article. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.