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SEFTON RESOURCES INC - UNDERRATED OIL PRODUCER (SER)     

ptholden - 04 Aug 2006 19:53


???

Sefton Resources is an independent AIM quoted Oil and Gas company operating in the US. The companys principal current assets are two producing oilfields in California (Tapia Canyon Field and Eureka Canyon Field); it is also in the process of buying up prospective coal bed methane acreage (CBM) in Kansas.

Update from July 2007 AGM

Finance

I revealed in my annual statement that discussions were well advanced with
Banking institutions. The final phase of the agreement with a suitable bank
without complex and restrictive terms is now very near. This is weeks away
rather than months.

Oil

Oil production at Tapia has averaged 4,100 BO during the last five months. Which
is in line with last years levels. Once this finance is in place we will be able
to move ahead with drilling.

Drilling

We have stayed close to drilling contractors and we are ready to move forward
quickly when this finance is available.

Steam generation

The equipment is now in place at Tapia. Preparation time is needed to connect
the equipment and carry out the necessary trials required to get the main work
started. We anticipate this steaming will start in the next couple of months. If
successful a significant amount of oil resources will move into the Proven
Producing Reserves category.

Joint Ventures

Discussions continue with a number of interested parties to develop our Anderson
counties gas assets.

New finance team

A new CFO has been appointed with good knowledge and experience of the oil
industry. A new assistant to undertake all the daily needs has also been
appointed.


SWOT ANALYSIS

STRENGTHS:

Sefton has two oil fields, both producing. One is already profitable, and the other is breaking even. This should generate good cashflow for the company over the medium term.
Sefton owns 100% of both its major oil interests and is now demerging its non-controlled oil interests in order to concentrate on those where it has full control (Sefton has recently disposed of its Canadian assets for CDN450k cash).
Sefton is establishing a track record of using modern extraction technologies to improve the efficiency of its fields.

WEAKNESSES:

Sefton has suffered from a number of one-off factors. While these were out of the companys control the problems it has faced since 2002 have held back development and taken up management time. Investor disenchantment may account for the current low rating.

OPPORTUNITIES:

Sefton has acquired acreage for CBM (coal bed methane) in Kansas. CBM gas production is a thriving market and Sefton believes it has acquired the acreage at advantageous prices. While this is a longer term prospect it is an exciting one and could eventually eclipse the oil interests.
There are a number of other fields in the Ventura Basin and more generally in California as a whole that Sefton may look to target now its cash flows are stronger.
Eureka is a semi-exploration play which may contain further upside. This cannot yet be evaluated.
At this valuation the company may prove an attractive target for a larger player.

THREATS

Owing to its geographical location the company continues to be exposed to the threat of bush fires, canyon floods and geological interruption (earthquake risk). Sefton is taking steps to mitigate this risk by investing in Kansas and although Forest Basin area is susceptible to tornados - gas facilities have a minimal surface footprint.

LINKS:

Sefton Resources Web Site

Quarterly Update (Mar 08)

Operations Update Dated 14 January 2008

Hardman Report

Final Results - Year Ended 31 Dec 2006

2007 AGM & Update

In The News - Oil Barrel Dated 31 January 2007

Daily California Crude Oil Prices (MIDWAY SUNSET 13)

Chart.aspx?Provider=EODIntra&Code=SER&Si

explosive - 14 Oct 2008 01:46 - 2070 of 2350

Profit held in shares and no intention on topping up. Lack of global credit is killing demand, emerging markets may need commodities or desire them but if they can't afford them then they can't buy them. At least SERs gearing allows for further slips in the price of oil so will out last the current climate. Progress on CBM however I feel will be very slow. The share pays no yield so in my view possibly better invested elsewhere.

barclay - 14 Oct 2008 02:09 - 2071 of 2350


Guys take a look at this youtube video: type in the most important video youll ever see, this professor talks about the exponential function in commodities,and shows you mathematically that in order to sustain 7% per annum demand we need to find a field the size of all the oil weve ever produced and consumed since records began, he also extrapolates what future prices of bread,coal oil ..... in 10-50 years
by the way bread will be 70 per loaf in 70 years, things are bad but just as the market bounced at a record bounce today,so will sefton. wages will have to rise soon because of inflation and that how people will afford higher priced goods, dont forget our grandparents could buy a barrel of oil for a schilling or dime but wages rose with inflation. Watch the video its very good!

martinl2 - 14 Oct 2008 08:54 - 2072 of 2350

explosive,

Don't talk yourself into missing the opportunity of a lifetime. Make no mistake, this is the time to be BUYING.
If you need further evidence, look at what the people with the money are doing such as Warren Buffet and Alan Sugar.

And remember that oil and most other commodities are priced in US$.

driver - 14 Oct 2008 09:12 - 2073 of 2350

barclay
You didnt post the video link by the way bread is reported to be coming down 5% on the month so are houses in case you hadnt noticed.

martinl2 - 14 Oct 2008 10:10 - 2074 of 2350

I confidently predict that this is the bottom for SER and that it will move higher than the current price by the end of this week.

explosive - 14 Oct 2008 11:43 - 2075 of 2350

Neither Buffett or Alan Sugar are buying SER though, why???

martinl2 - 14 Oct 2008 11:47 - 2076 of 2350

Bigger animals eat bigger food, explosive.

Its not worthwhile for them to buy a few x 10k worth of a 4m company. They buy m's worth for a small 3-4% stake which they can pick up in the market.

Just like you or I wouldn't bother with a sub-penny microcap where you can only buy a 100 worth.

driver - 14 Oct 2008 11:48 - 2077 of 2350

ex
What does Alan Sugar no about oil?

martinl2 - 14 Oct 2008 13:48 - 2078 of 2350

The oil and gas sector is doing great today, up nearly 10%. Many of the smaller stocks are up 15-20-30%+ there! Even basket cases like CSH and BLR are up 10%! Wish I was invested in the oil and gas sector.

kkeith2000 - 14 Oct 2008 14:22 - 2079 of 2350

martinl2 it looks like a lack of confidence in sefton to me, can't be many the size of us making money and still at this low s/p
We have a new broker now, can they be working on some kind of master plan, i do hope so

martinl2 - 14 Oct 2008 14:25 - 2080 of 2350

So do I keith.

kuzemko - 14 Oct 2008 15:01 - 2081 of 2350

ser- so far has done what it promised,i cant see why we should lose confidence in ser

barclay - 14 Oct 2008 20:43 - 2082 of 2350


Explosive type this into youtube ( The most important video you'll ever see) it is the first video int the results, watch it, trust me you will look at commodities in a different light after watching it.

By the way explosive, i searched for some bargains today,and i found 3 companies trading at 2 times earnings with 20% dividend yields covered 2.3 times, with broker strong buys and 500% price targets, it makes no sense, but one thing i know, they wont stay at that price forever.

barclay - 14 Oct 2008 21:01 - 2083 of 2350


the market is pricing in 50 dollars a barrel oil i think,that why sefton is down, but i dont think it will go down so low as opec wont be happy, i think about 70 dollars a barrel at the lowest, that is affordable and will bring inflation down, gordon brown is adding 5% to pensions next april, plus minimum wages should rise the same, because thats what the uk inflation rate is in september, even though inflation and interest rates are heading south,this will give people a bit of extra pocket money.

martinl2 - 14 Oct 2008 22:26 - 2084 of 2350

I would personally ignore dividend yields at the moment generally. I keep seeing companies cancel dividends to save money, at both ends of the market cap scale.

Opec meeting In a few weeks time and given what they said previously about their comfortable price range if the price is still at this level or lower we could start to see some dramatic cuts. For one thing their members will have gotten used to the high prices and the revenues they bring, so will more likely to comply with any cuts, and furthermore costs have risen due to investment in new fields and improved technologies. The era of low oil prices has gone. Think about it - without high oil prices there is no incentive to invest in all the new technologies and alternative hydrocarbon and other sources that are vital for the future and that have started to be looked at due to the recent high price levels.

Another factor is that the dollar is expected to start to weaken in the medium term which should increase commodity prices.

CWMAM - 15 Oct 2008 07:14 - 2085 of 2350

CHIEF EXEC BUYS SHARES @ 4P.

martinl2 - 15 Oct 2008 09:49 - 2086 of 2350

Nice one Jim lad. A decent purchase too.

kuzemko - 15 Oct 2008 13:29 - 2087 of 2350

goldman sachs reckons oil will rebounce back to 150 in near future.gazprom are still betting on 200up. i personally think that around 100 in near future is optimistic. for opec.opec and russian may not control the demand but they do control supply.

martinl2 - 15 Oct 2008 14:09 - 2088 of 2350

Goldmans have closed their short and gone long then?

capetown - 15 Oct 2008 14:36 - 2089 of 2350

Back in,cant resist at this price.
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