News and Press Releases
Operations Update
April 24, 2008
Sefton Resources Inc., the AIM listed oil and gas production company with assets
in California and Kansas, announces an update through its wholly owned
subsidiary TEG Oil and Gas USA Inc. (TEG USA) regarding the Tapia 2008 Q1
Drilling and Pilot Steam Programme.
Q1 Drilling Programme Wells
TEG USA has completed the on-site facilities infrastructure for the four new
wells drilled in February/March, 2008. This includes permitting the new
electrical service for the well pumps, installing downhole pumps and surface
pumping units, running new oil flowlines and casing gas flowlines, installing
two new meter runs and manifolds, and installing all onsite electrical control
boxes, subsurface conduits and motors. The Lackie A-4 well hookup was able to
utilize electrical service formally used by the shut-in Lackie A-1 well. All
work is complete on this well, the pump is running and the well is producing
oil. TEG USA will report initial production rates once the optimum pump rate is
established and oil rates have stabilized.
The final item to complete on the three Snow wells is in the hands of the
electrical utility company, Southern California Edison, who still needs to hook
up the inspected electrical infrastructure to the grid. The Snow wells will be
turned on as soon as Edison supplies the power to this new electrical service
panel for this lease. TEG USA has been given an estimated date of Wednesday,
April 23, 2008, for this hookup by Edison.
All wells will now go on full time and the Directors expect a corresponding
upswing in production levels from this point on, as well as no such delays in
the future.
Yule #7 Well - Cyclic Steaming Pilot
The one-week steam and two-week soak cycles have now been completed on the Yule
#7 well. The steam packer was pulled from the well and a temperature survey run.
The temperature survey was encouraging, indicating that after the initial
two-week soak period, the temperature across the Yule sand was at 403 F. Primary
steam injection temperatures were approximately 485 F. It appears that the
steaming has transferred a considerable amount of heat energy downhole since we
have observed only an 80 F drop in temperature over two weeks time. TEG USA
therefore increased the Yule #7 soak time to three weeks prior to installing the
production equipment, so that the heat energy could better dissipate into the
oil reservoir.
The Yule #7 well is now on production. TEG USA expects to produce only water
from the well for a few weeks until the injected steam (water) is produced back
and the relative permeability equilibrates in favour of oil production. The
gross fluid production rates, oil/water cuts, dynamic fluid level, and flowing
temperature will all be monitored during this time to learn more about the
specific parameters unique to this reservoir. These data will be used to refine
the steaming operation for the future.
The steam injection packer has been sent to Halliburton in Bakersfield to be
re-worked and prepared for installation in the Yule #10 well shortly. The Yule
#10 well will be steamed for a period of 14 days using lease gas from the Snow
#1 well to fire the steam generator. The soak period was originally programmed
for 21 days, however this may be modified pending the results at Yule #7. The
natural gas burner jet module has been reinstalled and reconfigured in the
boiler unit, replacing the propane module. Additionally, the high pressure pump
has been serviced and the water softening units have been upgraded to handle
higher hard-water supply rates. We will begin steaming the Yule #10 once the
redressed Halliburton steam packer is available. This is expected early in the
week of April 28, 2008
Production Levels
Tying in the new well facilities, adding injection facilities and Hartje Lease
tank work disrupted the production stream during the month of February and part
of March. Field personnel were forced to temporarily shut some wells in for
about one-third of the time during this period. All wells are now on full-time
and we expect a corresponding upswing to normal production levels from this
point on.
Other News
On April 18, 2008, TEG Oil & Gas USA, Inc. ("TEG USA"), was informed by Global
Signal Acquisitions IV LLC ("Global") that they had executed the Letter
Agreement negotiated with TEG USA, whereby Global would acquire from TEG a
perpetual easement on the land currently utilized by Global for its cellular
tower located immediately south of TEG's Tapia oil field but within its fee
property boundaries. Upon execution of a mutually acceptable Grant of Easement,
TEG will receive a purchase price of Three Hundred Seventy Five Thousand Dollars
($375,000.00). This transaction should close on or before Nov. 1, 2008. The
easement will utilize existing oil lease roads and therefore TEG does not
foresee the Grant of Easement as interfering with its existing oil and gas
operations. The Directors believe that consummating this transaction will
maximize surface land use.
The website re-construction is nearly complete and will be available shortly at
www.seftonresources.com.
Enquiries:
Jeremy Delmar-Morgan, Chairman, Tel: 077 8900 4874
John James (Jim)
Ellerton, CEO, Tel: 00 1 303 759 2700
David Millham, Investor Relations,
Tel: 020 7796 9999
Nicola Marrin, Seymour Pierce Ltd., Tel: 020 7107 8000
Note: The information in this release has been compiled and reviewed by Harry
Barnum, a director of Sefton, who is a qualified person for the purposes of the
AIM Guidance Note for Mining, Oil and Gas Companies. Mr. Barnum has Bachelors
and Masters Degrees in Geology and over 20 years of experience in the oil and
gas industry. He is a registered professional geologist in the State of
California.
Sefton Resources is an AIM listed oil and gas production company. Its main core
area of activity is in the East Ventura Basin in California, where it owns 100%
of two oil fields, Tapia Canyon (heavy gravity oil) and Eureka Canyon (medium
gravity oil), both of which have over twenty years of expected production life.
In addition, Sefton has over 40,000 acres in the Forest City Basin of Eastern
Kansas where Coal Bed Methane gas, as well as conventional oil and gas deposits,
are targets.