Drilling Commenced at Sefton's Tapia Canyon Field
Sefton announced that the drilling of four new wells has begun at the Tapia Canyon oil field in California and further progress has been made in the development of its gas operations in Kansas.
- Drilling of four new wells began at Tapia Canyon on Wednesday 16 November and expected take approximately five weeks to complete.
- Oil production in early 2012 is expected to rise by up to 75% to an estimated 240 barrels of oil per day, once the new wells are on stream.
- Vintage Production LLC, an Occidental Petroleum Corporation subsidiary,
- appear to have successfully drilled two horizontal wells in the adjacent oil field to Sefton's in Tapia Canyon.
- Dr. Farouq Ali's Interim report on the Tapia Canyon steamflood model reinforces earlier findings that Tapia Canyon has the potential to become an up to 1,750 barrels of oil per day operation.
- Southern Star gas interconnect agreement has been executed (21 November 2011), which will connect Sefton's pipeline system in Kansas to the Interstate Pipeline System and natural gas markets.
- North and West parts of the LAGGS gas pipeline system in Kansas now certified for operations with the adjacent Vanguard pipeline system expected to also be operationally certified shortly.
- Dr. Nafi Onat to update Competent Person Report on Kansas at the year-end.
Jim Ellerton, Executive Chairman, commented, "We are pleased to have begun our 4 well drilling program in Tapia Canyon in California, which is an important step in our ambitions to improve production and revenues and which, in addition, will give us invaluable data on the way the rest of the field is developed in conjunction with the findings of Dr. Farouq Ali's report. His Interim report once again confirms the huge potential of an up to 1,750 barrels of oil per day operation as well as an outline plan on how this can be achieved. Once we have completed drilling, this added data will be used in Dr. Ali's model to further refine the development of the Tapia Canyon oil field.
"In eastern Kansas, we are close to achieving a significant strategic advantage in our gas operations which will lead to the creation of significant cash flow and earnings opportunities and this, we expect, will also increase our possible reserves.
"Sefton now has in place a diversity of revenue generating operations and a strong platform for increasing levels of cash flow which will position us extremely well to achieve sustained growth and to pursue new opportunities."