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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)
martinl2 - 30 Oct 2008 17:21 - 2107 of 2350
cynic,
Please do your research into this company. It should not be tarred with a general 'junior E+P' brush. That implies lack of funding and cashflow and a long wait to profitability. Issues which do not apply to this company. In fact it is fairly unusual among such small capped companies in its cost stucture, funding, and growth prospects. Generic brush strokes may suit your general trading strategy but for specific companies they are useless. So if you want to discuss it with holders who have done thorough research and have a good understanding of the specific company, you may be wise to do the same.
- It has access to a $15m credit facility on good terms.
- It has very low production costs and limited fixed costs.
- It has at least 3 parallel routes to achieve significant growth in both production and reserves. with various cost and risk profiles. E.g., cyclic steaming of Tapia, infill drilling at Tapia, and pilot drilling in Kansas for CBM. These are all relatively cheap ways of increasing value and the first route especially is very low risk and low cost, and potentially very high reward.
- And what is the market cap now, 3.5m?
Please do your research into this company. It should not be tarred with a general 'junior E+P' brush. That implies lack of funding and cashflow and a long wait to profitability. Issues which do not apply to this company. In fact it is fairly unusual among such small capped companies in its cost stucture, funding, and growth prospects. Generic brush strokes may suit your general trading strategy but for specific companies they are useless. So if you want to discuss it with holders who have done thorough research and have a good understanding of the specific company, you may be wise to do the same.
- It has access to a $15m credit facility on good terms.
- It has very low production costs and limited fixed costs.
- It has at least 3 parallel routes to achieve significant growth in both production and reserves. with various cost and risk profiles. E.g., cyclic steaming of Tapia, infill drilling at Tapia, and pilot drilling in Kansas for CBM. These are all relatively cheap ways of increasing value and the first route especially is very low risk and low cost, and potentially very high reward.
- And what is the market cap now, 3.5m?
cynic
- 30 Oct 2008 17:36
- 2108 of 2350
how on earth can you how can you kid yourself that this is not a junior junior when its cap is only 3.5m? .....
and sorry to disagree (well perhaps not sorry!), but you can totally blind yourself with research and science ..... in case you had not noticed, we are in a vicious bear cycle and even top quality oilies are being hammered and will continue to be so ..... indeed, this will apply to nearly all stocks regardless of sector.
more fruitful "research" could well be to find out which stocks in which sectors - e.g. advertising and construction and mining and oils - remain very vulnerable, despite the fact that they may currently LOOK cheap
and sorry to disagree (well perhaps not sorry!), but you can totally blind yourself with research and science ..... in case you had not noticed, we are in a vicious bear cycle and even top quality oilies are being hammered and will continue to be so ..... indeed, this will apply to nearly all stocks regardless of sector.
more fruitful "research" could well be to find out which stocks in which sectors - e.g. advertising and construction and mining and oils - remain very vulnerable, despite the fact that they may currently LOOK cheap
martinl2 - 30 Oct 2008 17:45 - 2109 of 2350
So in your logic, it is the market cap 'group', not the characteristics of the actual company that determines your view of a stock?
So if for some bizarre reason, the shareprice of a 'junior junior' was to go up to 100m next week, would it suddently change from a 'junior junior' to something else? Or if a 100m stock was to similarly crash to 3.5m would that mean the company was now all of a sudden a 'junior junior'?
So if for some bizarre reason, the shareprice of a 'junior junior' was to go up to 100m next week, would it suddently change from a 'junior junior' to something else? Or if a 100m stock was to similarly crash to 3.5m would that mean the company was now all of a sudden a 'junior junior'?
cynic
- 30 Oct 2008 17:50
- 2110 of 2350
if a company's cap went from 3.5m to 100m in a big rush, it would certainly indicate something good was happening, though even at 100m it would still be pretty small.
and in the reverse scenario, you would have done your bollocks big time!
as i said before, the markets are heading south with a lot of nasties still to appear and lots of hedge funds being forced to liquidate positions ..... now is NOT the time to be chucking money at the market, let alone at tiddlers
and in the reverse scenario, you would have done your bollocks big time!
as i said before, the markets are heading south with a lot of nasties still to appear and lots of hedge funds being forced to liquidate positions ..... now is NOT the time to be chucking money at the market, let alone at tiddlers
halifax - 30 Oct 2008 18:15 - 2111 of 2350
cynic what investors do with their funds is entirely up to each individual investor if you wish to short shares that is your choice but be aware nothing goes down for ever otherwise you end up with nothing. We have reached a point where value is emerging investing is still a minefield but that has always been the case, if you can't stand the heat stay out of the kitchen.Shorters are beginning to be caught out and the risk is increasing as the market reaches its bottom.
cynic
- 30 Oct 2008 19:22
- 2112 of 2350
i see no real turn in the market until Q2 or even Q3 2009, though in that time, there will be false dawns and stomach-churning drops .... imo, it is almost safest to play with the indices, but that is certainly fraught with danger too
halifax - 30 Oct 2008 19:38 - 2113 of 2350
There will also be opportunities to invest in individual shares which will continue to do well despite all the negative news propaganda. Sooner or later the media will become tired of writing about the credit crunch and move on to news of "fresher disasters" and then value will out.
2517GEORGE
- 30 Oct 2008 19:51
- 2114 of 2350
I have my share of oil minnows along with non-oil minnows, most providing me with a loss atm, but my serious money has been buying (last 3 - 4 weeks), FTSE 100 co's at what are multi-year lows with the view that at some period in the future (up to 3 years or so), they will be far higher than they are today, with the added bonus of a decent divi (assuming they continue). However if a FTSE co provides a good %age return in a short timeframe then I will and have taken the profit. I also realise that whilst I have bought at multi-year lows they could indeed go lower, as happened with a recent SBRY purchase @ 268p, (dropped to 238ish) but patience very often pays off. Imo the outlook is not very good but there will be many co's that will outperform and give excellent returns, even as the broader market declines, and hopefully a minnow or two could really shine. Good luck all.
2517
2517
CWMAM - 31 Oct 2008 08:37 - 2115 of 2350
Bought 25000@3.10 went through as a sell.
kuzemko - 31 Oct 2008 13:44 - 2116 of 2350
cynic,
you should read the story about the traders that went short on vw/porsche.lost 200%.they siad the same thing you did"go short"!!! lot of stories like that out there.
in my opinion now it could be a good time for a value investor over long time.lot of companies are valued well below their intrinsic values.
short/long yes you can but only for a day.
you should read the story about the traders that went short on vw/porsche.lost 200%.they siad the same thing you did"go short"!!! lot of stories like that out there.
in my opinion now it could be a good time for a value investor over long time.lot of companies are valued well below their intrinsic values.
short/long yes you can but only for a day.
cynic
- 31 Oct 2008 14:23
- 2117 of 2350
vw/porsche was a freak ...... do you happen to know the price of vw today? .... i don't, but do know that at the peak of the freak it 1,000
the answer is 522, except you couldn't short at 1,000 as no one would lend the stock
the answer is 522, except you couldn't short at 1,000 as no one would lend the stock
martinl2 - 31 Oct 2008 17:18 - 2118 of 2350
Good luck with your shorting cynic. Are you short Sefton at the moment?
cynic
- 31 Oct 2008 17:24
- 2119 of 2350
no ..... far too small to short and would not be especially inclined to do so anyway
kuzemko - 02 Nov 2008 14:04 - 2120 of 2350
cynic,
you are very aggresive you must of lost lot of money.was a freak??? vw/por trader lost 100s millions going short.i could give you few more freak examples.like halifax said its your choice which way you go.however if you are such hot shot why you bother with small pie like ser??? you should be trading and devoting your time to ftse/etf cfd!!!
i'am not a trader, but an investor/ long term.i buy sit on and mean while still go on holidays.
you are very aggresive you must of lost lot of money.was a freak??? vw/por trader lost 100s millions going short.i could give you few more freak examples.like halifax said its your choice which way you go.however if you are such hot shot why you bother with small pie like ser??? you should be trading and devoting your time to ftse/etf cfd!!!
i'am not a trader, but an investor/ long term.i buy sit on and mean while still go on holidays.
cynic
- 02 Nov 2008 14:28
- 2121 of 2350
i have followed SER for a long time but have never bought or sold it ..... i tell things the way i see them, even if it goes against the general view ..... my only regret is that i have not been short of any number of vulnerable stocks in the current market - how stupid can you get!?
kkeith2000
- 04 Nov 2008 12:21
- 2122 of 2350
Breaking new all time low now, even sells for 50 coming in
Even during a bad month in Oct some stocks starting to recover
Urgent action needed by the company or we may be wiped off -)
Even during a bad month in Oct some stocks starting to recover
Urgent action needed by the company or we may be wiped off -)
martinl2 - 04 Nov 2008 12:33 - 2123 of 2350
I agree. Maybe time to spend some of that $375,000 (235,000) free money.
halifax - 04 Nov 2008 12:50 - 2124 of 2350
Seems a little odd after directors buying at 4p a couple of weeks ago?
CWMAM - 04 Nov 2008 13:04 - 2125 of 2350
Just bought @ 2.8p this must be the bottom.
cynic
- 04 Nov 2008 13:05
- 2126 of 2350
why so?
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