This stock looks like the most undervalued oil company on the stock exchange. >
Sefton Resources epic SER. It is currently trading at a price of 0.275p valueing the whole company at just 4M.

You might look at the market cap and assume that this company is just an explorer or a shell, but in fact Sefton is producing over 6000 barrels of oil per month with a monthly revenue of over $300k. It's recent work on it's Tapia oilfield exceeded expectations, meaning the company hit it's 200BOPD target 5 months early, and is now expecting resource and production estimates to be further upgraded. This is before it embarks on a steam-assisted programme early next year which
could see production rates multiplied 2-4 times! It is also looking at drilling further wells on the rich Tapia field in the light of the better than expected results.

So why is it only valued at 4M? The primary reason is lack of awareness of the stock, the sub-1p price puts many people off straight away, and a large overhang.

A year or so ago the company was put in financial dire straits by a
well blowout and had to undertake large discounted placings to get
itself back on track, which it has done with a vengeance. However,
some of these placing shares, which represent some 25% of the company
are being sold into the market, depressing the price so that despite the fact that the companies prospects have improved dramatically over
the past year, the price has dropped by nearly 60%.

This makes the company an absolute bargain at these rock-bottom prices. In 6 months time I expect this to be worth 3-5 times the current price. SERIOUSLY.

There is plenty of research to get your teeth into, the best place to start is the website :

www.seftonresources.com

There are 2 excellent articles on Sefton on the following website by Ian Mclelland (Jan/Feb 2006) - well worth a read to get up to speed on this company and it's prospects:

www.proactiveinvestors.com

Jameel - Don't mean to be rude but why don't you start your own DNO thread. I would be more likely to comment on a new thread DNO than here which is for SEO... Go for it, I know your new but a far better way to consolidate info researched by yourself and others..

MM's playing games with the spread, but want your shares before the production update.

I think that's basically it, TheMaster.

We all know this will probably be much higher in the coming months.

SER needs to start holding onto some cash, it'd be nice to see them either break even or make a small profit. Profits being spent in drilling and workover programes are very well looking at the long picture but its higher risk, as seen before when bush fires destroyed production. I would like SER to become more rounded with funds ready to spend to disaster strike again.

Bush fires didn't destroy production, they just delayed it for a short while. The blow out 4 years ago did the most damage for the company.

But there is a balance between saving money for a rainy day and investing it on increasing production and expansion, and adding shareholder value.

And another way of looking at it is that drilling more wells and working over old wells which increases the number of operating wells throughout the field actually REDUCES risk, as if a disaster strikes one well, then it is not such a catastophe if they have many other wells to continue running as normal?

By my calculations the MM's are still over 15M short over the last week, and they only managed a poxy 70k today. So wouldn't be suprised if we see some upwards action tomorrow.

Large 2.5m buy just sent the sp upwards, more to come this afternoon

250k sell at 0.26p.

And another chump bites the dust - DOH!

I see MRP is up 135% today (or +6M) on a 1.0mmcf/day gas strike.

Sefton has 2 gas wells totalling 3.0mmcf/day already, that are not being used!

MJ Post 345 I stand corrected it was indeed a blowout and agree with your post.

Regarding risk

SER have seen a decline since September and theres no reason why SER can't achieve added shareholder value and post a small profit.

If they pursue the gas route and invest in the infrastructure for exploiting the 3.0+mcf/day gas they have at Tapia?, then we could be looking at cashflow and profits dwarfing the current $300k/month from Tapia. In the US apparently small companies are selling their gas for $8-9 per thousand cubic feet, if we can produce 3mcf/day then we're talking about $720k-$810k per MONTH from gas.

Diversifying their production into gas would also reduce risk.

Very true MJ, infrastructure and pipelines are the only problem though.

Interesting "risk graph" explosive - not seen one of those before. Any idea what it is measuring to calculate the "risk"?

Hi MJ - RiskGrades are calculated by RiskMetrics based on asset-specific information (variation in assets price) and general market conditions (volatility of a basket of global equities). 0 is the perfect riskgrade as would be fully liquid like cash, 1000 would represent say a decline in demand or over supply in a volitile market on a good with high depreciation a good example would be say tomatoes in the middle of summer when price and shelf is lowest... Anyway I'm sure you dont want me ratteling on so have a look at http://www.riskgrades.com. The grading is consistant accross the markets and I refer to them mostly when considering a increase in my holding... Hope this helps..

Thanks explosive. Another tool to add to the research armoury.

I've got a feeling next week may be quite interesting for SER holders.

A lot is scheduled to be happening with this share in February, which of course starts on Wednesday..

mjr1234 i hope so all the other oils are leaVeing us behind ,i think we need more cash to get things moVeing.the money we are geting from 200bopd is not enough to get gas production started or drill more oil wells , this is where we could be traped until we build a cash pile .

I think they should have enough for quite a bit of drilling from the 200bpd, especially if it includes bringing old existing wells (pre-sefton) back into production. Out of the $300k/month revenue they should have at least $150k/month after costs, probably a lot more. So that's maybe $1M from the last 6 months of full production, although they said they were cashflow positive at the beginning of last year, so could be much more from this.

In addition they have some/all of the ~$1.6M that was going to be used for the acquisition of Monument Resources but that never happened. This money may be used to develop the gas infrastructure.

Looking good so far.

Luckypicker - now there's one chump who I hope doesn't buy into this stock.