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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

oilwatch - 18 Dec 2006 18:33 - 219 of 2350

"currently it is and therefore of no interest to me" - which begs the question...

cynic - 18 Dec 2006 20:37 - 220 of 2350

????? .... try "begs the question" but no matter ..... at its present cap, it is below my personal radar and as i posted earlier, am (have) lowering my exposure to oilies in general and E&Ps in particular ..... just do not feel this is the right sector at the moment

driver - 18 Dec 2006 21:21 - 221 of 2350

cynic
If you buy or not it will not move the sp I was trying to do you a favour by putting it on your radar at these low levels. I won't say I told you so when it hits 50p+

cynic - 18 Dec 2006 21:59 - 222 of 2350

your advice appreciated driver, but it's just a personal rule .... will continue to watch and hope that you have a 25 bagger in hand

explosive - 19 Dec 2006 18:40 - 223 of 2350

Makes me wonder why you even bother to follow the thread cynic if its not even on your radar.

cynic - 19 Dec 2006 19:06 - 224 of 2350

so keep wondering then ...... i follow all sorts of threads for my own interest or even amusement and just occasionally because i finally decide to invest (eg SOLA) .... in fact, i find most of my investments do not seem to have good following here, even when i post about them and they perform well (eg PFC, DOM, RTN etc etc)

Marcel1970 - 20 Dec 2006 11:30 - 225 of 2350

Can anyone tell me when SER are due an update

griffzino - 20 Dec 2006 13:15 - 226 of 2350

January and it should be good

driver - 10 Jan 2007 16:35 - 227 of 2350

Hardman update Jan 2007
They are not saying much until news comes from SER.


They are waiting news of a drilling rig being contracted
to expand oil production at the Tapia Oilfield.

They are going to generate fresh estimates as soon as they are able to do so, when a rig date is confirmed.

driver - 10 Jan 2007 16:40 - 228 of 2350

A post from the other side to cheer us up courtesy of graylyn


First half produced a pre-tax profit of $175,647 U.S. lets convert that to @ (1.90 = 1) 92,044.00 Sefton said in the accounts that first half included "Increased production costs" primarily as a result of repair work, this was $151,157 U.S. higher than the comparable period last year (79,055.00) so on the assumption that the second half should not repeat these same extra costs we would have $ 326,804 U.S. (171,099.00) profit on top of that during the first half production was affected by quote "Key wells being down for mechanical reasons for over TWO months, whilst awaiting a service rig" even so the av bopd was 130 at Tapia 100% owned oil field, once all service rig work was completed the production for Tapia was approx 150 bopd, at the second 100% owned oil field Eureka Canyon well clean-outs and pump changes were addressed whilst a service rig was available during late July, early August this had the effect of doubling production from 10 bopd to 20 bopd.

Teg has upgraded the facilities at Tapia, and the tanks and piping should now be completed, which will allow Higher volume of oil, also the tanks are to be insulated and fitted with heating equipment, this will facilitate better oil separation during the cold winter period, so I am hoping for a pre tax profit of around 250,000 on which no tax will be paid.

So with 115m shares in issue that would give approx EPS of 0.22p @ 4.75 today`s mid price would give a Historical PE of 21 Sefton are planning around 9 wells in the current year at Tapia, (this of course is as we know subject to rig availability) lets say they only get 5 wells extra online this year, assuming oil remains circa $60 per barrel and the new wells produce similar to the existing wells at Tapia, Sefton will be looking cheap I think, and they would not need huge financing to drill 5 wells, as some of this could be raised from cashflow, now all we need then is a joint venture for CBM with perhaps Petrol, which could be part of the reason for delaying financing, as until they have some sort of agreement with a partner over the financing of CBM they would hold off their final target loan requirement so as to roll out events in an orderly manner this year, It would make no sense to obtain a loan to expand the oil fields If they needed to go back to the banks within months and thrash out a new deal for CBM which I suspect they are going to partner with Petrol, also the hold up re-rigs may also be partly down to the finance issue as well as the availability, because until Sefton know exactly how much they can raise, and/or need to raise they can not commit to any thing other than a small drilling program and that may not be enough to entice the rig company as they will have bigger fish to tend to, my point is this, the market price for Sefton Resources shares is now really "Bargain Basement price" yes we know its Speculative but the upside If the afore mentioned comes together this year will be huge. good luck DYOR

cynic - 10 Jan 2007 17:24 - 229 of 2350

chart looks pretty grim and until we get a good cold snap, crude looks set to continue dropping ...... that is bad news for the quality producers let alone the E&P companies ..... my own view is that the oil sector is all wrong at the mo for new money

capetown - 24 Jan 2007 15:31 - 230 of 2350

Dare i say,blue and about time too!

2517GEORGE - 24 Jan 2007 15:46 - 231 of 2350

Volume is very low capetown but good to see blue, I think that with many of these small oilys, (and I hold several) it's jam tomorrow, and for some tomorrow never comes or is a long way off, so the passage of time is what's required. Cynic re 'the oil sector is all wrong at the mo for new money' you may well be right but surely it's better now than a couple of months ago when the likes of SER, CHP, GOO and others were much higher than today?
2517

rhino213 - 25 Jan 2007 08:27 - 232 of 2350

Latest release from sefton courtesy of AFX & RNS:

RNS:
Sefton Resources Inc
25 January 2007


Sefton Resource Inc
Trading Update

Sefton Resources Inc. (the "Company") today provides a trading update for the
first half of the financial year to 31 December 2006.

The Board anticipates that trading for the Group will be in line with its
expectations, and that it thus continues to trade profitably, during the second
half of 2006. During this period the Group has utilised its cash flow to
refurbish and renew all its surface equipment at Tapia, provide capital to
evaluate Eureka and continue development opportunities in Kansas.

TEG OIL & GAS USA, INC.

Tapia

Oil production at Tapia remained steady averaging over 4,000 BO/mo with the
exception of November when a key well was down for repair for part of the month.
Early decline rates from initial production of the newer wells have flattened
considerably and the current rates are being sustained. Facilities upgrades and
repairs continue at Tapia. Once the work has been completed later this year, it
will be capable of handling an additional 500 barrels of oil a day.

The Company has now received preliminary approval for the drilling of three
additional wells on its Snow USL lease. Permits for 5 wells (Hartje and Yule
Leases) had previously been received and these can be drilled at any time.
Several rigs are now available once the Company has its financing (See Below)
and permits in place.

In December, the Company commissioned the building of a steam generator that
will initially be used to stimulate production at the Tapia field. Construction
is expected to be completed and the steam unit operational about mid-year.

Eureka

The reconnaissance geochemical mapping of the Eureka Canyon field is completed.
Preliminary data is encouraging and supports the Board's plans to develop
further this field. Current production at Eureka is approximated 435 BO/Month.

TEG MIDCONTINENT, INC.

The Board believes that opportunities in Kansas continue to be extensive.

Anderson/Franklin Counties

A recent project developed to the West of the Company's acreage holding has
encouraged TEG MidContinent to consider a number of options. Sure Engineering
was contracted to consolidate and expand the available data, and one of its
conclusions was that:

"Net coal thickness of the Company's leases is 11 to 22 ft in Anderson County,
and 13 to 19 ft in Franklin County, exceeding the averages of the Bourbon Arch.
Thicknesses for the Riverton and Bevier coals on TEG acreage are near the
maximum for the region. TEG owns over 30,000 leasehold acres."

Additional work is now being carried out by Sure Engineering as a result of
successful drilling in the vicinity by other companies.

Leavenworth County

At Leavenworth County, TEG MidContinent has continued to acquire leases in an
area which the Board believes to be very viable. Its total acreage holding is
now over 7500 acres, acquired at competitive prices. In addition TEG is
currently in contract negotiations with several pipeline operators that provide
gas gathering system infrastructure or market access.

FINANCING

Based on the investment to date and the capital requirement needed to develop
these projects, Sefton Resources, Inc. is continuing to evaluate options with a
number of entities regarding the possibility of using debt and/or joint venture
arrangements with an industry partner to maximise the potential and minimise
risks.

CAZA LITIGATION

As indicated in the interim results reported September 22, 2006, Caza Drilling
Inc., and TEG Oil & Gas U.S.A. Inc., a wholly owned subsidiary of Sefton
Resources, Inc., were parties to two law suits following the 2002 "blowout" in
Tapia Field. The wrongful death lawsuit relating to the blowout was settled
for $4,200,000 with no liability or costs to Sefton Resources, Inc. or its
subsidiaries. In the lawsuit to claim damages against Caza, an initial
ruling on the litigation went against the Company. Following analysis of the
Ruling and available options, the Parties have agreed to settle the case and
have executed a Settlement Agreement that was agreed to and entered into the
Court records on January 3, 2007. The Settlement Agreement calls for Sefton to
pay $250,000 in exchange for resolution of all matters between the Parties.
The Company's balance sheet includes the contingent liability ($178,000) from
the litigation and as such, there will be no major impact to the Company's
financials.

BOARD AND MANAGEMENT CHANGES

The Board has unanimously agreed that the position of Chairman and Chief
Executive should be divided. As a result Jeremy Delmar-Morgan will become
Non-executive Chairman with Jim Ellerton continuing as Chief Executive. In
addition Cynthia Campbell, who joined the Group from Accountants, Gordon Hughes
& Banks LLP, has been appointed Group Financial Controller.

31/12/06 AUDIT

The Company is pleased to announce that Chantrey Vellacott DFK has been engaged
as the Company's auditors and we expect results to be released in April/May of
this year with an annual meeting expected in May/June.

For more information please contact

Jeremy Delmar-Morgan, Chairman
Telephone: 077 8900 4874

Jim Ellerton, CEO
303 759-2700

AFX:
LONDON (AFX) - Sefton Resources Inc said it anticipates first-half trading to be in line with its expectations with said trading continued to be profitable in the second half.

The company also said it will split the position of chairman and chief executive. It named Jeremy Delmar-Morgan as non-executive chairman and announced that Jim Ellerton will continue as CEO.

The oil company said it will pay 250,000 usd relating to two law suits that followed a 2002 'blowout' in Tapia Field. However, the company expects 'no major impact' on its profit because its balance sheet includes a contingent liability of 178,000 usd from the litigation.


Prices are up slightly already!

driver - 25 Jan 2007 09:13 - 233 of 2350

All looks good to me SER is well under valued, once the finance is in place and the extra five wells are up and running the sp should see 25p and beyond IMO.

The Board anticipates that trading for the Group will be in line with its
expectations, and that it thus continues to trade profitably.

NabCom - 30 Jan 2007 19:50 - 234 of 2350

Sefton on Oilbarrel
30.01.2007
Sefton Resources Weighing Up Its Options To Progress US Field Developments

http://www.oilbarrel.com/news/article.html?body=1&key=oilbarrel_en:1170122429&feed=oilbarrel_en

rhino213 - 01 Feb 2007 11:36 - 235 of 2350

That all looks good to me. They need to be careful not to overstretch themselves though.

There's some buying action going on today. Hopefully we'll see a nice rise in the SP soon. Unless those bloody MM's are playing games again that is!

driver - 03 Feb 2007 12:31 - 236 of 2350

From the other side courtesy of graylyn

Bull points:.........

1/ Caza case finnaly settled, with only a tiny scratch on finance $72,000 U.S. extra needed to be found on top of the $178,000 already put aside......closure.

2/ Tapia being continuously upgraded to accept up to 500 bopd all should be completed later in the year, this was started last year (If you have no storage where do you put the oil) " Oil production at Tapia remained steady averaging over 4,000 BO/mo with the exception of November when a key well was down for repair for part of the month. Early decline rates from initial production of the newer wells have flattened
considerably and the current rates are being sustained."

3/ The Company has now received preliminary approval for the drilling of three additional wells on its Snow USL lease. Permits for 5 wells (Hartje and Yule Leases) had previously been received and these can be drilled at any time.

4/ Rig availability was a problem......"Several rigs are now available once the Company has its financing and permits in place."

5/ Preparations for steam Injection, to ramp up production..........." In December, the Company commissioned the building of a steam generator that will initially be used to stimulate production at the Tapi field.Construction
is expected to be completed and the steam unit operational about mid-year."

6/ Eureka, survey completed.........." The reconnaissance geochemical mapping of the Eureka Canyon field is completed. Preliminary data is encouraging and supports the Board's plans to develop further this field. Current production at Eureka is approximated 435 BO/Month." Eureka produces a lighter oil than Tapia and commands a higher price per barrel.

7/ CBM leases are growing, massive potential............" The Board believes that opportunities in Kansas continue to be extensive."

Anderson/Franklin Counties

A recent project developed to the West of the Company's acreage holding has encouraged TEG MidContinent to consider a number of options. Sure Engineering was contracted to consolidate and expand the available data, and one of its conclusions was that: "Net coal thickness of the Company's leases is 11 to 22 ft in Anderson County, and 13 to 19 ft in Franklin County, exceeding the averages of the Bourbon Arch.

Whilst at At Leavenworth County, TEG MidContinent has continued to acquire leases in an area which the Board believes to be very viable. Its total acreage holding is now over 7500 acres, acquired at competitive prices. In addition TEG is currently in contract negotiations with several pipeline operators that provide
gas gathering system infrastructure or market access.

8/ Financing.......

"Based on the investment to date and the capital requirement needed to develop these projects, Sefton Resources, Inc. is continuing to evaluate options with a number of entities regarding the possibility of using debt and/or joint venture arrangements with an industry partner to maximise the potential and minimise
risks.


9/ Board changes, this should improve the relationship with pi`s as well as moving the company forward........

"The Board has unanimously agreed that the position of Chairman and Chief Executive should be divided. As a result Jeremy Delmar-Morgan will become Non-executive Chairman with Jim Ellerton continuing as Chief Executive. In addition Cynthia Campbell, who joined the Group from Accountants, Gordon Hughes
& Banks LLP, has been appointed Group Financial Controller."


10/ After last years painfully drawn out realise of the Annual results, a change of auditor...............
"The Company is pleased to announce that Chantrey Vellacott DFK has been engaged as the Company's auditors and we expect results to be released in April/May of this year with an annual meeting expected in May/June."

11/ with around 115 million shares in issue SEFTON IS VALUED at just over 5million @ 4.74p per share they have been profitable for 18 months, they are in a friendly country, analysts have stated that the CMB assets could "Eclipse the oil assets" they own 100% of BOTH oilfields, there is NO debt, they are cash positive they make a profit "WHAT DO WE WANT THE MOON ON A STICK" LOL.

Bear points:.......

1/ Finance needs to be announced (this will be soon I feel)

2/ Investors need to regain confidence in the company (board changes recently made should help)

3/ oil is a risky game

4/ oil price could fall

All just my take on events so far this year, 2007 Seftons recovery year! DYOR

capetown - 07 Feb 2007 09:43 - 237 of 2350

Driver good morning,looks like this is coming to life again,i hope this time its on an upward trend,have been very tempted to sell in the past but glad i held on.

Greyhound - 07 Feb 2007 09:58 - 238 of 2350

I think before too long we should see some form of financing package/loan facilities being announced. At that point we should see a sharp move higher.
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