News and Press Releases
Operations update
February 4, 2009
Sefton Resources Inc, (Sefton), the AIM listed oil and gas production company
with assets in California and Kansas, announces further advances in its planned
development programmes for its two wholly owned subsidiaries, TEG Oil and Gas
USA, Inc (TEG USA) and TEG MidContinent (TEG). These follow on from the last
update on December 7, 2008.
Since that date TEG USA has accomplished the following:
-
Completed a 3,700 bbl steam injection cycle in the Snow #5 well (Tapia field).
The steam generator was fired utilizing lease gas from its own Yule #8 well. Oil
production from the Snow #5 well significantly increased from 9.1 BOPD in
November to an average of 63 BOPD during the first 25 days in January.
-
Completed the drilling of three more wells at its Tapia field during December
2008 and January 2009 (two Yule zone oil wells and one dedicated shallow gas
well).
-
The new oil wells Yule #11 and Hartje #18 are already on production. The gas
well, Yule #9, was drilled and cased through the Yule oil zone for later
completion and production of oil. It will first be perforated to utilize the
lease gas for steaming operations
-
Received the preliminary maps for the follow-up geochemical field sampling over
the Eureka Canyon prospect area. The new maps enhance the prospect areas over a
large portion of the Eastern Eureka Canyon lease acreage.
-
Received $50,000 on its Cell Tower Sale of Easement. The balance of $325,000 is
due on 1 April 2009.
TEG MidContinent has:
- Drilled and cased its first pilot CBM well in its Anderson/Franklin Counties CBM
Drilling Programme.
-
Purchased the Petrol Waverley Project assets for $100,000 (Anderson/Franklin
counties).
-
Acquired an option to purchase an inactive pipeline in Jefferson/Leavenworth
counties.
TEG USA Production
TEG USA sold a total of 4,110 bbl of oil during December. This was slightly down
on the previous month (4,269 bbl during November) as a result of taking three
significant wells off-line during the steam injection and soak cycle period at
Snow #5 and the clearing of the well pads at Yule #7 and #10 for the drilling of
Yule #9 and #11. All the wells have returned to production and all wells capable
of oil production are now pumping.
Yule #11, drilled and completed to the Yule oil zone, started production on 19
January and has tested over 30 BOPD in each of its tests. It is estimated that
the well will settle to about 28 to 30 BOPD, which is similar to the adjacent
Yule #7 and #10 wells and at the historic average for wells in the Tapia Oil
Field.
Hartje #18, also drilled and completed to the Yule oil zone, commenced production
on 28 January. Production for the well will be reported as soon as it becomes
available. It is expected to produce at above average oil rates, based on its
location, the thick pay zone, excellent oil shows while drilling and the
interpretation of the wire line logs run in the well.
Both wells encountered oil at depths slightly greater than 1,000 feet below the
surface, as predicted by pre-drilling mapping.
TEG MidContinent
The first well (Miller A2-1) of the pilot drilling programme at Anderson Franklin
County was drilled and logged during December. Log analysis indicated eight feet
of Riverton coal (at approximately 1,300 feet) and a presence of conventional
sand that calculated wet from the logs but tested gas during the drilling. The
well is located one mile west of the Lankard well that has “neutron-density”
cross-over on its logs (similar conventional sand -- indicative of possible gas
productive zone).
TEG has three more locations permitted and ready to drill. Drilling could start
as soon as the decision is made to continue after completing the Miller A2-1 or
after tie-in with the newly acquired disposal system.
For $100,000, TEG has purchased all of Petrol’s assets, including 17 wells and
associated equipment, located in the Petrol Waverly Project. The assets include
a gas gathering and water disposal system, two Salt Water Disposal wells and 10
million cubic feet of gas per day processing facility. The connection point for
the gathering and disposal system is located three miles west of TEG’s CBM pilot
programme. By completing this acquisition TEG is assured access into a major
purchase/interstate pipeline and now has available salt water disposal for its
pilot programme at greatly reduced costs, considering that the cost of a single
saltwater disposal well is approximately $200,000.
TEG has also negotiated and executed a “Letter of Intent” for the purchase from
HDP, Inc.’s (Lubbock, Texas) inactive pipeline and gas gathering system, to
include right-of-way. TEG has deposited $15,000 (non-refundable) with HDP and
has until March 20, 2009 to conduct “due diligence”. The “Vanguard Pipeline” is
located west and north of TEG’s Leavenworth project. The pipeline will provide a
gathering system for TEG’s future drilling and will establish a basis for
potential joint ventures in exploration, gas gathering and transportation. The
total purchase price is $115,000.
Chairman Jeremy Delmar-Morgan commented
“The access that we now have into major pipelines will have a significant effect
on planned development of our Kansas assets. In addition, the drilling and
steaming programme at Tapia is now producing good results.
We believe focusing on partially developed long-life assets that we control will
ensure low lifting costs and carry us through the commodity price fluctuations
that we are currently seeing.”
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 issued on March 16, 2006.
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.
Enquiries:
Jeremy Delmar-Morgan, Chairman, Tel: 077 8900 4876
John James (Jim) Ellerton, CEO, Tel: 00 1 303 759 2700
David Millham, Investor Relations, Tel: 078 5094 9324
Peter Trevelyan-Clark/Nick Harriss/Wye-Li Long, Blomfield Corporate Finance
Ltd., Tel: 020 7489 4500
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 45,000 acres in the Forest City Basin of Eastern
Kansas where Coal Bed Methane gases, as well as conventional oil and gas
deposits, are targets.