Sefton Resources, the US focused oil and gas company, says production will be reduced at its Tapia Canyon site in California as it drills four new wells.
The drilling operation at Tapia started on the 16th of November and is expected to take six weeks.
The company hopes the new wells will see a 75% boost in production to 240 barrels a day by 2012. In order to complete the project, however, Sefton will use existing well pads.
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This means it will have to stop current operations, losing 88 barrels of oil per day for perhaps as long as 14 days.
Separately, a recent scientific assessment of the possible resources at Tapia suggest the site may be able to yield as much as 1,750 barrels per day.
In addition, recent operations by a subsidiary of Occidental Petroleum, Vintage Production, on a site adjacent to Sefton's field, suggest the area contains significant reserves.
Sefton's other major project, a gas pipeline in Kansas, has enabled the company to sign an agreement with Southern Star, an interstate distribution firm. The agreement will see Sefton's own facilities connected to the interstate pipeline, enabling it to sell its own, and other producers' gas across the US.
Commenting on the development, Jim Ellerton, the group's Executive Chairman said:
"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's share price was 1% up by 11.14am at 3.08p. In the year to date the stock has risen 135%.
BS
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