SER.L Regulatory News (SER)

24 Apr 2008 07:00

Sefton Resources Inc24 April 2008 SEFTON RESOURCES OPERATIONS UPDATE Sefton Resources Inc., the AIM listed oil and gas production company with assetsin California and Kansas, announces an update through its wholly ownedsubsidiary TEG Oil and Gas USA Inc. (TEG USA) regarding the Tapia 2008 Q1Drilling and Pilot Steam Programme. Q1 Drilling Programme WellsTEG USA has completed the on-site facilities infrastructure for the four newwells drilled in February/March, 2008. This includes permitting the newelectrical service for the well pumps, installing downhole pumps and surfacepumping units, running new oil flowlines and casing gas flowlines, installingtwo new meter runs and manifolds, and installing all onsite electrical controlboxes, subsurface conduits and motors. The Lackie A-4 well hookup was able toutilize electrical service formally used by the shut-in Lackie A-1 well. Allwork is complete on this well, the pump is running and the well is producingoil. TEG USA will report initial production rates once the optimum pump rate isestablished and oil rates have stabilized. The final item to complete on the three Snow wells is in the hands of theelectrical utility company, Southern California Edison, who still needs to hookup the inspected electrical infrastructure to the grid. The Snow wells will beturned on as soon as Edison supplies the power to this new electrical servicepanel 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 correspondingupswing in production levels from this point on, as well as no such delays inthe future. Yule #7 Well - Cyclic Steaming PilotThe 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 initialtwo-week soak period, the temperature across the Yule sand was at 403 F. Primarysteam injection temperatures were approximately 485 F. It appears that thesteaming has transferred a considerable amount of heat energy downhole since wehave observed only an 80 F drop in temperature over two weeks time. TEG USAtherefore increased the Yule #7 soak time to three weeks prior to installing theproduction equipment, so that the heat energy could better dissipate into theoil reservoir. The Yule #7 well is now on production. TEG USA expects to produce only waterfrom the well for a few weeks until the injected steam (water) is produced backand the relative permeability equilibrates in favour of oil production. Thegross fluid production rates, oil/water cuts, dynamic fluid level, and flowingtemperature will all be monitored during this time to learn more about thespecific parameters unique to this reservoir. These data will be used to refinethe steaming operation for the future. The steam injection packer has been sent to Halliburton in Bakersfield to bere-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 #1well to fire the steam generator. The soak period was originally programmed for21 days, however this may be modified pending the results at Yule #7. Thenatural gas burner jet module has been reinstalled and reconfigured in theboiler unit, replacing the propane module. Additionally, the high pressure pumphas been serviced and the water softening units have been upgraded to handlehigher hard-water supply rates. We will begin steaming the Yule #10 once theredressed Halliburton steam packer is available. This is expected early in theweek of April 28, 2008 Production LevelsTying in the new well facilities, adding injection facilities and Hartje Leasetank work disrupted the production stream during the month of February and partof March. Field personnel were forced to temporarily shut some wells in forabout one-third of the time during this period. All wells are now on full-timeand we expect a corresponding upswing to normal production levels from thispoint on. Other news On April 18, 2008, TEG Oil & Gas USA, Inc. ("TEG USA"), was informed by GlobalSignal Acquisitions IV LLC ("Global") that they had executed the LetterAgreement negotiated with TEG USA, whereby Global would acquire from TEG aperpetual easement on the land currently utilized by Global for its cellulartower located immediately south of TEG's Tapia oil field but within its feeproperty 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. Theeasement will utilize existing oil lease roads and therefore TEG does notforesee the Grant of Easement as interfering with its existing oil and gasoperations. The Directors believe that consummating this transaction willmaximize surface land use. The website re-construction is nearly complete and will be available shortly atwww.seftonresources.com. Enquiries: Jeremy Delmar-Morgan, Chairman, Tel: 077 8900 4874John James (Jim) Ellerton, CEO, Tel: 00 1 303 759 2700David Millham, Investor Relations, Tel: 020 7796 9999Nicola Marrin, Seymour Pierce Ltd., Tel: 020 7107 8000 Note: The information in this release has been compiled and reviewed by HarryBarnum, a director of Sefton, who is a qualified person for the purposes of theAIM Guidance Note for Mining, Oil and Gas Companies. Mr. Barnum has Bachelorsand Masters Degrees in Geology and over 20 years of experience in the oil andgas industry. He is a registered professional geologist in the State ofCalifornia. Sefton Resources is an AIM listed oil and gas production company. Its main corearea 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 (mediumgravity 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 EasternKansas where Coal Bed Methane gas, as well as conventional oil and gas deposits,are targets. This information is provided by RNS The company news service from the London Stock Exchange