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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)
2517GEORGE
- 20 Jul 2007 11:12
- 759 of 2350
Hi SECRUOSER--------it doesn't say, but with SER being a producer surely the finance is not that hard to come by.
2517
2517
Mine Man - 20 Jul 2007 11:24 - 760 of 2350
George, I had numerous telephone conversations with JDM since he took his new posiion and he always stated getting the finance was not an issue, getting favourable terms was.
To get the favourable terms, they basically had to show that they could increase revenue and sustain it, cope with the increased production and present the plan.
The whole point of the last year, whilst bloomin annoying to shareholders who were not aware of what was going on most of the time, was to get to that stage.
They have now confirmed the finance is only weeks away and is not restrictive or unfavourable.
This is the first time they have actually stated anything on finance so positively and in black and white in an AGM statement, and RNS and the hard copy year end results.
To get the favourable terms, they basically had to show that they could increase revenue and sustain it, cope with the increased production and present the plan.
The whole point of the last year, whilst bloomin annoying to shareholders who were not aware of what was going on most of the time, was to get to that stage.
They have now confirmed the finance is only weeks away and is not restrictive or unfavourable.
This is the first time they have actually stated anything on finance so positively and in black and white in an AGM statement, and RNS and the hard copy year end results.
2517GEORGE
- 20 Jul 2007 11:34
- 761 of 2350
Mine Man--------thanks for that, still not aware of how much they're looking to raise, no doubt all will be revealed------eventually. Good luck to all patient holders.
2517
2517
capetown
- 20 Jul 2007 11:36
- 762 of 2350
Same here mineman.
Mine Man - 20 Jul 2007 11:44 - 763 of 2350
I was told 3m. I foolishly forgot to ask whether that was dollars or pounds :O) Based on drilling costs and the number of wells, I would reckon on pounds, which in the grand scheme of things, is not a lot.
SECRUOSER
- 20 Jul 2007 11:51
- 764 of 2350
The infamous "Hardman report" states $3.7m will be borrowed to drill 5-10 wells. But this is now more than a year out of date. My understanding is that the wells will cost around $400k to drill and complete each, so if they drilll all 9 wells they have permits for, that would be $3.6m. Maybe they will also borrow a bit extra to help set up the steamer ? But I don't think they will need 3m ($6m) at this stage, unless they have other plans up their sleeve?
REDHILL - 20 Jul 2007 13:00 - 765 of 2350
Strange Yaso hasn't appeared today on the other side.
MM
Somebody wants you to e-mail them over there.
RED
MM
Somebody wants you to e-mail them over there.
RED
Mine Man - 20 Jul 2007 13:07 - 766 of 2350
Red, can you post seftonresources@fsmail.net will get to me! Maybe YARSE0 will drop me a line lol! Don't think that he has disappeared Red, he has been desperate to get me off there because I was the main challenge to him. He is just waiting for me to post so to stir everybody into believing I am the fault of his trashing the thread. I used to use MoneyAm before, they monitor the BB's far better than ADV-FN and actually post warnings to perpetrators of abuse.
Mine Man - 20 Jul 2007 13:29 - 767 of 2350
I'm just about to leave for the North, problem in the Tapas Bar lol! Have a good weekend all and let's see if we can get this BB a bit more active next week! Adios!
SECRUOSER
- 20 Jul 2007 14:00
- 768 of 2350
We got a good price yesterday MM. Now 5.55p to buy.
REDHILL - 20 Jul 2007 14:13 - 769 of 2350
MM
Will do.
level 2 now improved to 5v1 4.75p-5.75p
Will do.
level 2 now improved to 5v1 4.75p-5.75p
john50 - 20 Jul 2007 15:03 - 770 of 2350
L2 1v1 seyp 5 hood on 6.
moonshine - 20 Jul 2007 18:47 - 771 of 2350
Interesting rise & MM movement today, considering the low volume. This post from the dark side is interesting:
griffzinho - 20 Jul'07 - 14:46 - 43657 of 43658
Could someone PLEASE copy and paste this as the muppet has me on filter.
The company is making an operating profit of $380,000 after adding back non-cash items, but taking it from a management accounting perspective would give a better guide to future cash flow and profitability.
The key here is that current production revenue is contributing to a fixed cost base of around $1.5 Million. Current production revenue is around $2.7 million based on 2006 production of 53,323 barrels of oil. (average $ per barrel = $50.60)
Now to explain to someone who obviously has no formal accounting training.
Taking a contribution based view.
Each barrel of oil produced at present is sold at $65 a barrel.
Lifting Costs are around $15 barrel (upper end of range)
So contribution of each barrel of oil sold = $50.
Current production = 4,100 a month = $2.46M Contribution to fixed costs and profit. Around $1 Million in operating profit before non cash deductions.
Additional 9 wells at 30 bopd per well (arbitrary figure, but conservative) = 270 bopd additional production - 12,300 bopm or 147,000 barrels a year.
147,000 * 50 Contribution = $7.4 Million or around $5.8M in operating profit before non cash, interest and taxation.
Target Production (with steaming and 9 wells) = 800 bopd.
800 x 365 = 292,000 barrels a year * $50 = $14.6 Million.
However assume lifting costs increase to $25 dollars due to steaming.
Contribution = $40 x 292,000 barrels $11.7M or $10M before non cash and interest.
TAKING A MANAGEMENT ACCOUNTING PERSPECTIVE IT IS QUITE EASY TO SEE HOW A DEBT FACILITY OF $3m TO $10m COULD BE SERVICED QUITE EASILY.
ALL THIS NEEDS IS FINANCE TO DRILL WELLS AND IMPLEMENT STEAMING, ROUND IN ROUND IN CIRCLES YAS0, WE ALL KNOW THAT FINANCE IS ESSENTIAL.
WILL WE GET THE FINANCE, WE ARE ALL WAITING, AND YOU HAVE MADE NO NEW POINTS OF NOTE IN MONTHS. WE ALL KNOW THE SITUATION HERE. YOU LACK SO MUCH FINESSE IN YOUR ARGUMENTS AND NO FINANCIAL BACKING THAT IT IS MUNDANE AND PATHETIC
griffzinho - 20 Jul'07 - 14:46 - 43657 of 43658
Could someone PLEASE copy and paste this as the muppet has me on filter.
The company is making an operating profit of $380,000 after adding back non-cash items, but taking it from a management accounting perspective would give a better guide to future cash flow and profitability.
The key here is that current production revenue is contributing to a fixed cost base of around $1.5 Million. Current production revenue is around $2.7 million based on 2006 production of 53,323 barrels of oil. (average $ per barrel = $50.60)
Now to explain to someone who obviously has no formal accounting training.
Taking a contribution based view.
Each barrel of oil produced at present is sold at $65 a barrel.
Lifting Costs are around $15 barrel (upper end of range)
So contribution of each barrel of oil sold = $50.
Current production = 4,100 a month = $2.46M Contribution to fixed costs and profit. Around $1 Million in operating profit before non cash deductions.
Additional 9 wells at 30 bopd per well (arbitrary figure, but conservative) = 270 bopd additional production - 12,300 bopm or 147,000 barrels a year.
147,000 * 50 Contribution = $7.4 Million or around $5.8M in operating profit before non cash, interest and taxation.
Target Production (with steaming and 9 wells) = 800 bopd.
800 x 365 = 292,000 barrels a year * $50 = $14.6 Million.
However assume lifting costs increase to $25 dollars due to steaming.
Contribution = $40 x 292,000 barrels $11.7M or $10M before non cash and interest.
TAKING A MANAGEMENT ACCOUNTING PERSPECTIVE IT IS QUITE EASY TO SEE HOW A DEBT FACILITY OF $3m TO $10m COULD BE SERVICED QUITE EASILY.
ALL THIS NEEDS IS FINANCE TO DRILL WELLS AND IMPLEMENT STEAMING, ROUND IN ROUND IN CIRCLES YAS0, WE ALL KNOW THAT FINANCE IS ESSENTIAL.
WILL WE GET THE FINANCE, WE ARE ALL WAITING, AND YOU HAVE MADE NO NEW POINTS OF NOTE IN MONTHS. WE ALL KNOW THE SITUATION HERE. YOU LACK SO MUCH FINESSE IN YOUR ARGUMENTS AND NO FINANCIAL BACKING THAT IT IS MUNDANE AND PATHETIC
moonshine - 20 Jul 2007 19:01 - 772 of 2350
Hardman July Report
SEFTON RESOURCES
At Seftons AGM, the directors confirmed that discussions are now at an advanced stage with banking institutions and are in the home straight and we quote, weeks away rather than months. We understand that talks have been more protracted than we had hoped, to reach agreement on simple and non-restrictive terms which should be to the long-term benefit of shareholders. Indeed, we really look forward to the company having its shackles removed and pushing forward with new drilling. On the operational front, oil production at Tapia has averaged 4,100 BO during the last five months which is in-line with last years levels.
The steam generation equipment for enhanced recovery is now in place at Tapia and it is anticipated that steaming will start in the next couple of months. If successful, this work should upgrade a significant amount of oil resources into the
Proven Producing Reserves category, thus adding value.
Sefton have stated that discussions are continuing with a number of interested parties to develop Seftons Anderson Counties gas assets and that a new CFO has been appointed.
SEFTON RESOURCES
At Seftons AGM, the directors confirmed that discussions are now at an advanced stage with banking institutions and are in the home straight and we quote, weeks away rather than months. We understand that talks have been more protracted than we had hoped, to reach agreement on simple and non-restrictive terms which should be to the long-term benefit of shareholders. Indeed, we really look forward to the company having its shackles removed and pushing forward with new drilling. On the operational front, oil production at Tapia has averaged 4,100 BO during the last five months which is in-line with last years levels.
The steam generation equipment for enhanced recovery is now in place at Tapia and it is anticipated that steaming will start in the next couple of months. If successful, this work should upgrade a significant amount of oil resources into the
Proven Producing Reserves category, thus adding value.
Sefton have stated that discussions are continuing with a number of interested parties to develop Seftons Anderson Counties gas assets and that a new CFO has been appointed.
NabCom - 21 Jul 2007 12:48 - 773 of 2350
Just thinking about BLR, I used to have a paltry holding everyone was slamming the management, TW got impatient with them and announced the fact, they could do no right, then, last week 85%, and who here raked it in?I know one person who did and unfortunately it wasnt me.
Having said that what did they achieve:
Productionnope
Tested for production.nope
The results of the drilling to date are very encouraging and if the testing
results are positive, Acacia Este could be a highly significant discovery for
Black Rock.
very encouraging and if
could be
85%!
Having said that what did they achieve:
Productionnope
Tested for production.nope
The results of the drilling to date are very encouraging and if the testing
results are positive, Acacia Este could be a highly significant discovery for
Black Rock.
very encouraging and if
could be
85%!
RAS - 21 Jul 2007 18:39 - 774 of 2350
"Sefton are pleased to announce we have arranged a finance facility on good terms" +100% 12p
"Sefton are pleased to announce the commencement of drilling. Initial results are expected within the next month" +50% 16p
"Sefton are pleased to announce excellent flowrates from all new wells. We estimate total daily production rates will now be in the region of 500bpd" +75% 24p
"Sefton are pleased to announce the steaming trial is a success with a 100% average initial boost in flowrates over the 2 trial wells. We will now commence a full steaming programme across all our main producing wells" +60% 29.75p
"Sefton are pleased to announce that following the implementation of cyclic steam stimulation across the Tapia field average production rates have now reached 800bpd" +65% 36.5p
"Sefton are pleased to announce a profit of $10.1m." +45% 50p
Well you never know :)
driver
- 21 Jul 2007 18:47
- 775 of 2350
"Sefton are pleased to announce a jv to develop Seftons Anderson Counties gas assets" + 50% 100p
RAS - 21 Jul 2007 18:49 - 776 of 2350
:)
Mine Man - 23 Jul 2007 07:07 - 777 of 2350
Good morning all! Hoping to see that finance deal announced this week! Lot's of strange trading and the third week of 'Finance only weeks away rather than months'. Of course, the past two years events have always been "next week" with Sefton but hopefully JDM will change the previous poor communication we had from JE in how he would release news to investors suggesting weeks which rolled into months!
moonshine - 23 Jul 2007 08:12 - 778 of 2350
Morning all.
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