Back to square one again, looks like we will have to wait a while longer

OB 25.07.2008

Steam Test Starts To Have An Impact For Heavy Oil Specialist Sefton Resources

Heavy oil may not be at the sexy end of the oil business but, given sky high oil prices and a world hungry for more of the black stuff,

These wells can be drilled in less than a week for US$600,000, brought online within 30 days and pay back within a year. If the company can keep the momentum up, production of 800 bpd could be on the cards with much greater potential over the longer term:

http://www.oilbarrel.com/email_index.html?page=/news/article.html?body=1&key=oilbarrel_en:1216951242&feed=oilbarrel_en

These wells can be drilled in less than a week for US$600,000, brought online within 30 days and pay back within a year. If the company can keep the momentum up, production of 800 bpd could be on the cards with much greater potential over the longer term: according to analysts at Hardman & Co, peak production at Tapia should ramp up to 150,000 bpd by 2009 through conventional drilling with significant upside if the steam-enhanced recovery programme proves viable.

Can sefton really get up to 150,000 bopd in 2009? i did a rough calculation and the revenue ran into 2.7 billion, correct me if im wrong, is this correct, because i thought tapia was only going to produce 800 bopd, if these targets are viable that is amazing, and the drilling and production is so quick as well, other oil companies take a few years to bring even one well into production after drilling.

I just want to confirm because i am on another forum with sefton holders interactive investor.com and these guys are a bit down and frustrated with the latest RNS update and i dont think they are aware that the long term potential of sefton is a lot greater than the 20p share price target most of them have.

I think 150,000 bopd is a misprint. Should be 150,000 bbl per year. Actually I have just answered you on 3i.

barclay
No it's a miss print 800bpd would be nice and possible $32m a year would give an sp approaching 40p+ plus CBM on top of that.

+ Eureka on top of that...

driver,

Interested why you put the figure of 40p at 800bopd / $32m a year?

By my calculations, eps would be over 10p per share with 800bopd, justifying a higher shareprice than 40p, more like double that?

I do think 800bopd, if achieveable is some time off though, although waiting another 1-2 years for a 15-bagger would be OK I suppose:)

martinl2
Yes I agree it was a quick calc out of my head I have always said this could get to 80p+ with Eureka and CBM

Bargain basement comes to mind.

start spreading the news then guys. This will only head north if enough people are interested in buying the shares.

and then the evil MM's have to let it go that way too!

When we've finished buying.

Just spotted this on the BBC News website....

Obama urges opening oil reserves

If he does make it to the White House what do you think this policy would do to the Oil Market and more importantly for us Sefton?

lower oil prices! tax cuts for producers???

Surely that would be more likely to raise oil prices.

kuzemko,

The article refers to using the strategic oil reserves (stockpile of oil), in order to help lower fuel prices in the short-term.

A good positive update will see this back to 10p ser are making plenty the sp is at a bargain basement price.

very nice 2 trades today at 6.50p.???

Sefton Resources, Inc.
('Sefton' or the Group)
Interim Results for the six months to 30 June 2008


Highlights
Revenue doubled to $2.6m from $1.3m
Profits increased five fold to $904k from $179k
Banking facility increased to $15m
New Nominated Advisor and Broker appointed

Chairman, Jeremy Delmar-Morgan pointed out that 'the Group's financial position continues to improve, bringing Sefton closer to its stated goal of 'building a strong platform of assets, generating sufficient cash flow to operate and grow the business'. While we will continue to grow our California assets, we will now embark of the development of our Kansas assets, utilizing the improved banking facility and growing cash flow. The appointment of a new nominated Nomad and Broker will, we believe, assist us in enhancing the Group's profile to the benefit of all shareholders.


Chairman's statement

In my last annual statement I was able to forecast that Sefton was now ready to take the next step in its development programme. I am please to report that the results of the past hard work are starting to show in our financial results.

During the first half of 2008 oil and gas revenue more than doubled to $2,594,873 from $1,276,127 for the comparative period in 2007 and $2,977,691 for the whole of 2007. The increased activity meant that costs and expenses increased to $1,690,510 from $1,096,993, but profit improved five fold to $904,363 from $179,134 at this time last year and $204,652 during all of 2007.

The encouraging increase in oil and gas revenue and net income was a result of spending $2,889,028 on our oil and gas assets, compared to $488,380 for the same period in 2007 - a function primarily of utilizing some cash flow and some of the available bank facility.

Total assets increased by over $5m to $13,488,405 from the comparative period in 2007, and while liabilities increased by almost $4m, to $5,300,258 - the majority of which is attributable to the use of $3.3m draw from the bank facility - the total shareholder equity increased from $6,831,299 to $8,128,147.

Our steaming and drilling programmes at Tapia are on schedule. The results have been extremely encouraging, but the differences in reservoir and drainage conditions can result in variances between the wells response. All show an improvement and we are extremely excited about applying the cyclic-steam stimulation to both old and new wells field-wide.

We will be working on the two gas wells Yule#8 and Snow#1 in the coming weeks. If the mechanical issues in either of these wells can be solved, such that gas can be supplied from them to the steam generator at the appropriate rate and pressure, the systematic steaming of other wells in the field will begin accordingly.

We have also budgeted funds for the drilling of three new wells on the Yule Lease during the fourth quarter of 2008. One of the new wells may be used to provide a new gas supply well. The other two will be oil producers. In addition we have initiated permitting of five new wells on the other Tapia leases, which should be completed in the coming months for drilling to start during 2009.

At our Eureka Canyon field we successfully carried out the clean-out and pump replacement operation during June. Monthly production has improved from an average of 230 BOPM to 410 BOPM during July. Work with W.L Gore, Inc is continuing on the geochemical survey and field work for the follow-up which is scheduled for this month - September. We are now in the process of refining our sampling grid identified in the initial survey.

An updated engineering report by Reed W. Ferrill and Associates was prepared for the first half period, which reflected an improvement in the Group's proved developed reserves to the year end 31 December 2007 resulting from the expenditures on the Group's assets. This does not reflect the encouraging results that we have achieved from the current cyclic steaming pilot programme, which will be reflected in the 2008 report. The present day value is approximately $165,000,000 (constant costs/prices, discounted 10%).

I am pleased to be able to report that as a result of improved reserves, production, revenue and net income, the line of credit facility with the Bank of the West has been increased to $15m.on extremely competitive terms.

The revised line of credit will also enable Sefton to buy back the Group's stock from surplus funds if we consider this appropriate. This revised agreement adds flexibility to the Group's financing options in developing and growing.

Finally, the Board has decided to engage the firms of Blomfield Corporate Finance Ltd as Nomad and Religare Hichens, Harrison plc as Broker, both effective from October 1, 2008. Management believes that the profile in the marketplace of Sefton will be enhanced by this move. With the improvement in financials, banking facilities and the new Nomad/Broker we have greater flexibility in our growth path.

Jeremy Delmar-Morgan

Chairman
September 3, 2008

Enquiries:
Jim Ellerton, CEO 00 1 303 759 2700
Jeremy Delmar-Morgan, Chairman 077 8900 4874
David Millham, Investor Relations 07850 949324
Jonathan Wright/Nicola Marrin, Seymour Pierce 020 7107 8000

Looks pretty positive to me.....


This RNS alert is brought to you by Digital Look.
RNS Number : 5871C
Sefton Resources Inc
03 September 2008


Sefton Resources, Inc.
("Sefton" or the Group)
Interim Results for the six months to 30 June 2008


Highlights
Revenue doubled to $2.6m from $1.3m
Profits increased five fold to $904k from $179k
Banking facility increased to $15m
New Nominated Advisor and Broker appointed

Chairman, Jeremy Delmar-Morgan pointed out that 'the Group's financial position continues to improve, bringing Sefton closer to its stated goal of "building a strong platform of assets, generating sufficient cash flow to operate and grow the business". While we will continue to grow our California assets, we will now embark of the development of our Kansas assets, utilizing the improved banking facility and growing cash flow. The appointment of a new nominated Nomad and Broker will, we believe, assist us in enhancing the Group's profile to the benefit of all shareholders.


Chairman's statement

In my last annual statement I was able to forecast that Sefton was now ready to take the next step in its development programme. I am please to report that the results of the past hard work are starting to show in our financial results.

During the first half of 2008 oil and gas revenue more than doubled to $2,594,873 from $1,276,127 for the comparative period in 2007 and $2,977,691 for the whole of 2007. The increased activity meant that costs and expenses increased to $1,690,510 from $1,096,993, but profit improved five fold to $904,363 from $179,134 at this time last year and $204,652 during all of 2007.

The encouraging increase in oil and gas revenue and net income was a result of spending $2,889,028 on our oil and gas assets, compared to $488,380 for the same period in 2007 - a function primarily of utilizing some cash flow and some of the available bank facility.

Total assets increased by over $5m to $13,488,405 from the comparative period in 2007, and while liabilities increased by almost $4m, to $5,300,258 - the majority of which is attributable to the use of $3.3m draw from the bank facility - the total shareholder equity increased from $6,831,299 to $8,128,147.

Our steaming and drilling programmes at Tapia are on schedule. The results have been extremely encouraging, but the differences in reservoir and drainage conditions can result in variances between the wells response. All show an improvement and we are extremely excited about applying the cyclic-steam stimulation to both old and new wells field-wide.

We will be working on the two gas wells Yule#8 and Snow#1 in the coming weeks. If the mechanical issues in either of these wells can be solved, such that gas can be supplied from them to the steam generator at the appropriate rate and pressure, the systematic steaming of other wells in the field will begin accordingly.

We have also budgeted funds for the drilling of three new wells on the Yule Lease during the fourth quarter of 2008. One of the new wells may be used to provide a new gas supply well. The other two will be oil producers. In addition we have initiated permitting of five new wells on the other Tapia leases, which should be completed in the coming months for drilling to start during 2009.

At our Eureka Canyon field we successfully carried out the clean-out and pump replacement operation during June. Monthly production has improved from an average of 230 BOPM to 410 BOPM during July. Work with W.L Gore, Inc is continuing on the geochemical survey and field work for the follow-up which is scheduled for this month - September. We are now in the process of refining our sampling grid identified in the initial survey.

An updated engineering report by Reed W. Ferrill and Associates was prepared for the first half period, which reflected an improvement in the Group's proved developed reserves to the year end 31 December 2007 resulting from the expenditures on the Group's assets. This does not reflect the encouraging results that we have achieved from the current cyclic steaming pilot programme, which will be reflected in the 2008 report. The present day value is approximately $165,000,000 (constant costs/prices, discounted 10%).

I am pleased to be able to report that as a result of improved reserves, production, revenue and net income, the line of credit facility with the Bank of the West has been increased to $15m.on extremely competitive terms.

The revised line of credit will also enable Sefton to buy back the Group's stock from surplus funds if we consider this appropriate. This revised agreement adds flexibility to the Group's financing options in developing and growing.

Finally, the Board has decided to engage the firms of Blomfield Corporate Finance Ltd as Nomad and Religare Hichens, Harrison plc as Broker, both effective from October 1, 2008. Management believes that the profile in the marketplace of Sefton will be enhanced by this move. With the improvement in financials, banking facilities and the new Nomad/Broker we have greater flexibility in our growth path.

Jeremy Delmar-Morgan
Chairman
September 3, 2008

Enquiries:
Jim Ellerton, CEO 00 1 303 759 2700
Jeremy Delmar-Morgan, Chairman 077 8900 4874
David Millham, Investor Relations 07850 949324
Jonathan Wright/Nicola Marrin, Seymour Pierce 020 7107 8000


June 30, June 30, December 31
2008 2007 2007
(unaudited) (unaudited) (audited)

CURRENT ASSETS:
Cash and cash equivalents $ 86,953 $135,410 $ 5,789
Accounts receivable 665,671 192,735 414,801
Other receivables - related party 135,380 108,185 159,692
Prepaid expenses and other assets 26,975 1,975 6,769
Total current assets 914,979 438,305 587,051


OIL And GAS PROPERTIES FULL COST METHOD, net 12,540,749 7,861,600 9,789,223

EQUIPMENT AND VEHICLES, net 32,677 43,410 30,871


TOTAL ASSETS $ 13,488,405 $ 8,343,315 $ 10,407,145

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable $ 731,799 $ 406,391 $ 810,942
Accrued expenses 24,034 47,991 162,666
Accrued expenses - related parties 117,000 77,884 179,549
Notes payable, current portion 349,775 163,825 385,059
Total current liabilities 1,222,608 696,091 1,538,216

NOTES PAYABLE:
Note payable 273,554 681,485 338,335
Note payable - bank 3,300,000 0 911,317
3,573,554 681,485 1,249,652


ASSET RETIREMENT OBLIGATION 504,096 134,440 504,096

Total liabilities 5,300,258 1,512,016 3,291,964


STOCKHOLDERS EQUITY:
Common stock, no par value, 200,000,000 shares
authorized, 116,387,779 shares issued and outstanding 13,217,831 12,790,863 13,049,227
Stock subscription receivable -30,047 -30,047 (30,047)
Treasury stock -58,602 -58,602 (58,602)
Accumulated (deficit) -4,941,035 -5,870,915 (5,845,397)
Total stockholders' equity 8,188,147 6,831,299 7,115,181

TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 13,488,405 $ 8,343,315 $ 10,407,145


Six Months Six Months Year Ended
Ended June 30, 2008 Ended June 30, 2007 December 31, 2007
(unaudited) (unaudited) (audited)
REVENUES:
Oil and gas sales $ 2,594,873 $ 1,276,127 $ 2,977,691

COSTS AND EXPENSES:
Oil and gas production 406,387 274,967 672,845
Depletion and depreciation 148,500 149,000 304,965
General and administrative 934,126 644,434 1,519,848
Share based compensation 126,179 0 197,220
1,615,192 1,068,401 2,694,878

INCOME (LOSS) FROM OPERATIONS 979,681 207,726 282,813

OTHER INCOME (EXPENSE):
Interest income - 66 417
Interest expense (75,318) -28,658 (78,578)
(75,318) (28,592) (78,161)

NET INCOME (LOSS) $ 904,363 $ 79,134 $ 204,652



Basic and diluted gain (loss) per common share 0.0078 0.0007 0.0018

Basic and Diluted Weighted average
shares outstanding 116,214,067 115,109,527 115,409,587



Six Months Ended Six Months Ended Year Ended
June 30, 2008 June 30, 2007 December 31, 2007
(unaudited) (unaudited) (audited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 904,363 $ 179,134 $ 204,652
Adjustments to reconcile net income (loss) to net cash from
(used in) operating activities:
Depletion and depreciation 148,500 149,000 304,965
Compensation expense related to stock options 126,179 197,220
Changes in operating assets and liabilities:
Accounts receivable (250,870) 161,832 (42,627)
Prepaid expenses and other (20,206) 17,875 13,080
Other receivables - related party 24,312 - (69,115)
Accounts payable (79,143) (78,052) 326,499
Accrued expenses - related party (62,549) 52,884 154,549
Accrued expenses and other (138,632) 12,410 126,985
Net cash provided by (used in) operating activities 651,954 495,083 1,216,208

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of oil and gas properties (2,889,028) (488,380) (2,184,816)
Purchase of property and equipment (12,806) - (4,857)
Proceeds from disposal of subsidiary - - -
Net cash transferred with subsidiary - - -
Net cash (used) by investing activities (2,901,834) (488,380) (2,189,673)


CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable 2,288,618 11,442 948,318
Payments on notes payable - - -147,473
Proceeds from sale of common stock 42,425 48,342 109,486

Net cash provided by financing activities 2,331,043 59,784 910,331

EFFECT OF EXCHANGE RATE CHANGES ON CASH - - -

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 81,163 66,487 (63,134)

CASH AND CASH EQUIVALENTS , BEGINNING OF YEAR 5,789 68,923 68,923

CASH AND CASH EQUIVALENTS, END OF PERIOD 86,952 135,410 $ 5,789


This information is provided by RNS
The company news service from the London Stock Exchange

END

sorry about the formatting on the above - just couldn't be bothered to go through the whole thing sorting it out!

Good results today more wells planned increased profits and a possible share buy back a bit slower than we all thought but that's Sefton onward and upwards