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Sefton Resources (SER)

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Thursday 13 June, 2013

Sefton Resources

California Production Report

RNS Number : 9310G
Sefton Resources Inc
13 June 2013
 

13 June 2013

Sefton Resources, Inc.

("Sefton" or the "Company")

 

 

California Production Report

 

Sefton Resources, Inc. (AIM: SER), the independent oil and gas exploitation and production company with interests in California and Kansas, announces a production report on California.

 

 

Highlights:

                             

·    Oil production for May 2013 filed with the DOGGR is 4,333 barrels (139 barrels of oil per day).

 

·    Steaming of the oil wells on the Snow USL and Yule leases continues to support this improvement in production. The ongoing steaming of the Hartje lease wells is expected to add further production.

 

·    Oil production continues to be restricted by limited water disposal facilities. The Company has been in discussions concerning the acquisition and permitting of nearby wells for water disposal which could provide a significant saving on the costs of drilling a new water disposal well.

 

 

Commenting today, Jim Ellerton, Chairman of the board said:

 

"Sefton has operated the Tapia oil field efficiently whilst successfully demonstrating that thermal stimulation enhances oil production and reserves even when using a small steam generator. The Company is currently cyclic steaming wells on the best producing lease (Hartje) for the very first time. This will mean that all the major leases will have been steamed ahead of receiving the results of a thermal simulation study from Dr. Ali which should outline how the field is to be fully developed in an economic and cost effective manner."

 

For further information please visit www.seftonresources.com or contact:

 

John James Ellerton, Chairman of the Board

Tel: 001 (303) 759 2700

Dr Michael Green, Investor Relations  

Tel: 0207 448 5111

Nick Harriss, Nick Athanas, Allenby Capital (Nomad)

Tel: 0203 328 5656

Neil Badger, Dowgate Capital Stockbrokers (Broker)

Tel: 01293 517744

Alex Walters, Cadogan PR

Tel: 07771 713608

 

 

Oil production

 

Oil production figures for California reported to the California Division of Oil, Gas & Geothermal Resources ("DOGGR") for the month of May 2013 were 4,333 barrels of oil which equates to 139 barrels of oil per day (BOPD), a 7% increase over the previous month. The table below shows oil production for the year to date.

 

Net oil production figures reported to the DOGGR

Month

DOGGR total production

barrels of oil

Average number of barrels of oil per day

January 2013

3,446

111

February 2013

2,918

104

March 2013

3,208

103

April 2013

3,874

129

May 2013

4,333

139

Note: May final numbers have been submitted to the DOGGR to be posted on its website.

 

Following the announcement of the California oil production for June 2013 in mid-July, the Company will be reporting production data on a quarterly basis for both California and Kansas.

 

 

Cyclic steaming

 

The cyclic steaming of the wells on the Snow USL and Yule leases continues to support this improvement in production. At the same time, the ongoing steaming on the Hartje lease is just beginning to add to the level of production. At the beginning of June 2013, the Company started steaming the third well on the Hartje well pad and our team anticipates better oil production from these wells as this program progresses and steamed wells come back on line. Currently, the Hartje #17well is just coming back into production, the Hartje #14 well has been steamed and is now in the soaking process and the Hartje #15 well is being steamed.

 

 

Water disposal facilities

 

Oil production at Tapia continues to be restricted to some degree by limited water disposal facilities. The Company has been in discussions with a neighbouring operator and regulatory personnel regarding the acquisition and conversion of two wells (which are not economically producing oil at this time) with associated equipment on an adjacent lease drilled within the last five years to use for water disposal. Preliminary economic analysis indicates that this could provide a significant saving on the costs of drilling a new water disposal well.

 

 

About Sefton

 

Sefton Resources is an oil and gas exploitation and production company with significant scope to develop its three major areas of interest in onshore United States. Sefton's business strategy is to acquire long life, partially developed reserves with controlling interests, and maximize shareholder value through asset development using the Company's own funds initially then involve third party capital, farm-out or merger. At this time, Sefton operates all its assets, the majority of which are 100% owned.

 

Currently Sefton has a market capitalisation of approximately £3.5 million and a higher PV(10) value for its unrisked proved reserves and unproved resources. The key operational focus at this time is on developing three revenue sources from both California and Kansas:

 

Enhanced Oil Recovery (EOR) projects in California

 

Sefton owns 100% of two oil fields in the East Ventura Basin, California - Tapia (heavy gravity oil) and Eureka Canyon (medium gravity oil). The current operational focus is to develop Tapia with an active well drilling and work-over programme in conjunction with the use of cyclic steam production enhancement. Sefton engaged Petrel Robertson Consulting to construct a geologic model to be utilised by Dr Farouq Ali, a recognised expert, in a thermal simulation study to fully optimise production and reserve development of the Tapia field. Tapia generates the majority of Sefton's revenue at this time and has 2012 year-end estimated Proved Reserves (P1) of 3.5 million barrels.

 

Natural Gas Transmission in Kansas

 

Three gas pipelines have been acquired by Sefton in North East Kansas. The LAGGS pipeline in Leavenworth County has been fully refurbished and is now connected to the Southern Star Interstate Pipeline system which allows gathering, transportation and sales of natural gas outside local Kansas markets. Plans are to join the Vanguard pipeline to the LAGGS system (Leavenworth County) which will increase the scale of this gathering system. This means Sefton will be able to transport its own and third party natural gas to a national market and generate additional revenues. A third pipeline in Anderson County is planned to be connected to an interstate pipeline system in the future, which will provide additional opportunities for redevelopment of oil and natural gas.

 

Exploration and Production in Kansas

 

In North East Kansas (Forest City Basin), Sefton has a significant and growing acreage position (Leavenworth and Anderson Counties) where conventional oil, gas and coal bed methane (CBM) prospects have been identified. The current operational focus is in Leavenworth County where a workover, recompletion, surface equipment replacement and leasing programme is under way that will see oil, gas and CBM wells brought back into production. Initial revenues are from oil whilst additional gas assets are being assembled for future development as pipelines become operational. Estimated 2012 year-end Proved Reserves (P1) for the Leavenworth portion of our Kansas assets are 82,653 barrels of oil and 2.06 Bcf of gas; and total unrisked Proved Reserves and Unproved Resources of 832,485 barrels of oil and 14.4 Bcf of gas for the same area.

 

 

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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