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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

Mine Man - 24 Jul 2007 21:31 - 813 of 2350

Nab, a lot of people have offloaded over the past 6 months due to extreme negativity from various sources, constant let downs from the company with regards predicted dates for certain things to happen, ridiculous emails from Gary etc and the SP is at the same level now as when I bought in at .480 before consolidation! In fact, less!!!!!!!!!!!!!!!!!!!!!

Judging by your comment regarding a sudden change in sentiment by he who shall not be mentioned ever again, I would also think now would be the time to buy in, top up or whatever.

And I don't say mainly because of that, I reckon the news we are now in possession of will dictate a move forward of reasonable proportion as it is the first time in two years that an RNS has been released that actually shows some actual achieved advancement! The Hardman report I do not see as particularly incorrect or written by dreamers, I see it as an "if you get finance, this is what you can do" report. I think it was taken out of context when it was first released and the herd piled in before realising that getting the finance was not going to be done the following week. I certainly didn't expect a year to pass without anything announced to say they had it all in hand and I daresay many people who were piling in at 10p have been stuck with a 50% loss ever since or sold at a loss as the months went by, another reason for the steady decline in the SP.

I can't see any downside here now (short of them announcing finance talks have collapsed) because with that cash, we have 9 new wells and a helluva lot more oil!

NabCom - 25 Jul 2007 00:58 - 814 of 2350

MM
I sold a small amount on that spike and bought most of them back afterwards, just too soon obviously never expecting to be back here again, still, everything does seem to be falling into place now, hopefully.

moonshine - 25 Jul 2007 07:48 - 815 of 2350

Morning all!

REDHILL - 25 Jul 2007 07:53 - 816 of 2350

Yes good morning.

Mine Man - 25 Jul 2007 08:34 - 817 of 2350

Morning Moon, Red! Do you both feel goooooooood! The air is FULL of positivity! Three buys to start the day and a finance RNS due any time soon (within the next few weeks)? Is that a bit like "tomorrow"? :O)

kkeith2000 - 25 Jul 2007 08:58 - 818 of 2350

Good morning all

It would be good to get the finance sorted and then start with the drilling. It's been a long time waiting for this
But i think someone pointed out a steady flow over the remainder of the year could see this one go to 25p to 30p hope so anyway

By the way is the steamer going to used on existing wells or could this be used say on the new wells when drilled

Thanks

moonshine - 25 Jul 2007 09:04 - 819 of 2350

Feel better today, MM. Hope they can sign that finance deal soon and get things cracking. Wonder how many rigs they could get at any one time? I seem to remember someone reporting that JE had said that the operator had 2 available. That would be nice, but things could have changed since then.

Mine Man - 25 Jul 2007 09:07 - 820 of 2350

JDM said rig availability was not an issue but I guess that can change. I would have thought that if they were confident of signing a finance deal, they would have already set the dates with the rig operators, which would explain his comment/confidence?

moonshine - 25 Jul 2007 09:13 - 821 of 2350

kkeith, according to reports from the AGM, the steam generator is going to be used on Yule wells first. There is one new well planned for Yule, and two wells were drilled there in 2005. Apart from that there are a couple of old wells which probably can't be steamed?

I would hope that they would drill the new well, and then start the steaming process on the two old wells. That way they would guarantee production levels with the new well before starting trials on steaming.

SECRUOSER - 25 Jul 2007 09:37 - 822 of 2350

kkeith,

4/5 of the wells drilled in 2005 and all the new wells will be steam-ready.

kkeith2000 - 25 Jul 2007 09:37 - 823 of 2350

Thanks moonshine

I don't know if you saw the news last night but it was on about the major producers looking for oil and how difficult it is to find sources with the problems throughout the world

Makes you wonder how valuable seftons reserves will be in a safe and stable country

Mine Man - 25 Jul 2007 09:52 - 824 of 2350

Bearing in mind that Sefton's drilling is almost guaranteed to be successful, it's not as though we are going to be inundated with RNS's stating poor drill results.

Sefton has a "everyone's a winner" drilling rate!

SECRUOSER - 25 Jul 2007 09:54 - 825 of 2350

Still 500k available online at 5.375p. 5.235p for 150k.

Where are the MM's getting all this stock from?

Mine Man - 25 Jul 2007 10:50 - 826 of 2350

Sec, always the possibility they don't have it and are expecting an awful lot of profit taking when the finance news is released?

SECRUOSER - 25 Jul 2007 10:53 - 827 of 2350

You mean short selling it? No way are they going to get 'profit taking' at under 5.25p when the finance news is released!

10.25p perhaps.

It's as though someone dumped 1M or so but I thought we'd have seen a 'K' trade by now.

O/T I see IHGP being pushed down on tiny sells?

ptholden - 25 Jul 2007 11:02 - 828 of 2350

It's not unknown for MMs to give the impression that they have more stock than is actually the case. I would imagine they are aware that a stream of positive news is near and may be trying to obtain cheap stock prior to any such news. The more likely scenario however is that someone has dumped. If and when the financing news is released we should be able to determine what is what by the movement in the SP.

pth

SECRUOSER - 25 Jul 2007 11:15 - 829 of 2350

Limits improved a bit with this tick-down. 150k maximum @5.25p now.

If someone has dumped, where are the trades though? This has been going on for more than 5 days, I thought.

SECRUOSER - 25 Jul 2007 12:17 - 830 of 2350

Looking a bit better now.

Mine Man - 25 Jul 2007 12:23 - 831 of 2350

Looking a LOT better now lol!

Mine Man - 25 Jul 2007 12:25 - 832 of 2350

Seem to be able to access the website but not any of the content, maybe they are getting ready to upload the updated presentation, or maybe it's just another glitch!!!
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