The proceeds will be used to finance the continued development of the 100%-owned Tapia Canyon oil field in California as well as accelerating the development of the opportunities in Kansas which include obtaining further oil and gas leases and joining Sefton's gas pipeline systems to the interstate pipeline.

The new common shares will represent approximately 11.98% of the company's enlarged issued share capital immediately following the placing.

Sefton also announced that two wells out of the four planned have been completed.

Yule No.12 well was completed on 25 November and Yule No.9R/D was completed on the 5 December.

A third well, Hartje No.19, is currently being drilled which will be followed by the last well, Hartje No.20, in the coming weeks.

Cores have been collected from Yule No.12 and Hartje No.19 wells and will soon be collected from the Hartje No.20 well, all of which will be analysed by CoreLab of Bakersfield, California.

These results will then be added in to the steam model developed for the field and provide a final steam flood design to be utilised in the Enhanced Oil Recovery development programme.

Executive chairman Jim Ellerton said: "We have made good progress on the drilling at Tapia and hope to have this completed soon and to see the increased production and revenues this will deliver.

"At the same time we are pleased to have taken the opportunity to strengthen our financial position so that we remain well placed to make the most of the opportunities we have identified for growth."