What follows is a post by 'The Matador' on advfn this morning, that in my view gives a superb summary of Sefton's acheivement over the last few years leading up to the position they are now in. Should be read by all who believe the present shareprice in any way reflects reality.

"The Matador - 29 Jan'08 - 09:22 - 11832 of 11834


The 9 Page, Closely and Hastily Typed Bull Report, aptly named Game On!


I have started this closely typed report from early 2006, when it can be seen that certain elements were being put into place that will eventually pay off for long suffering investors.

Unlike the unseen 19 page closely typed report I will be addressing POSITIVE and NEGATIVE points, neither ramping or deramping. The facts as we have seen them!

The following two years realised little, in fact NOTHING of value to investors and it appears that the COMPANY WERE LAX in their responsibilities with regards to keeping information flowing, keeping market interest and promoting the company as a public company should have been.

However, on reflection, it is easy to see why.

Sefton Resources are a small oil company, a small producer and without a serious upgrading to their facilities and financial situation, they were unlikely to set the market alight.

It appears that they were LACKING IN MANAGERIAL RESPONSIBILITY TO INVESTORS, had NO FINANCIAL OFFICER, the CEO was hands on, passing comment to investors that failed to materialise, the corporate secretary emailing investors with information that should really have remained within the company and chat was free to anybody who called, in many cases giving a false impression of the status of the business.

However, in 2006, things started to change, albeit in such small ways that most investors failed to notice, the market appeared to take with a pinch of salt and hence there was little reaction from either.

Initially, 2006 saw Surface equipment at Tapia being replaced and repaired, increasing its handling capacity by approximately 2,000 barrels and the infrastructure, all tanks, pipes and lines etc
being put in place, complying with the stringent California regulations.


In Kansas, we saw an increase to 34,000 acres with the majority of the leases for 5 years with an option to renew for an additional 5 years. The leases, although mainly Coal Bed Methane gas prospects, also have conventional oil and gas potential so there are far reaching future possibilities, so far untapped, for new oil plays.

Bearing in mind, when Sefton get to looking at these assets, Leavenworth, east of Anderson/Franklin counties, where they have with 7,000 acres of leases, will be far easier to bring into production through available gas pipelines.

So, bullet points here are:

* Surface equipment upgrades
* Additional handling capacity
* Increased acreage to the portfolio
* Oil, gas and CBM plays

Later in the year, a report was released confirming that Sefton had made its first, interim profit, a massive increase in sales, up to 306% and a well drilling plan for 5 new wells.

Although the end of year results showed a loss, much of the revenue was invested into the earlier mentioned upgrades, so it would be fair to say that this, based on what we know now, was a sensible move in the long term game plan.

Whilst the production cost rose for the period, this was solely due to the upgrades on site, which were financed from revenue, not from bank borrowing.

The company also confirmed that permits had been signed off for the 5 additional planned wells and were awaiting the same for an additional 4 wells, expanding the drilling programme to 9 wells.

More information was released about Eureka, with the contractual agreement with W.L.Gore, a widely reknowned geochemical survey company that are recognized for their success in this field.

There were, at this time, 1500 acres in Seftons portfolio of which only 40 were being used to produce a small quantity of oil. Whilst W.L.Gore were carrying out their survey, which will dictate future drilling plans for Eureka, Sefton took the opportunity to conduct pump changes and well clean outs which resulted in restoring production from less than 10 BOPD to approximately 20 BOPD.


First profit reported
Upsurge in sales
Permits to drill ageed
Additional 4 wells under application
Repairs to Eureka wells, giving increased production
Future potential, subject to survey, for remaining 1460 acres


The Forest City Basin/Bourbon Arch CBM development play is advancing at quite a rate toward Seftons acreage and the optimism for successful drilling here is shared by other companies who are working close by.
Petrol is drilling to the West and have, to date drilled and completed 19 new wells and have a further 12 permits to drill of which three are right on the boundaries of Seftons land.

Petrol is selling gas into the Enbridge system that crosses Seftons acreage and Heartland Oil, another company working close by has initiated four pilot projects in an area east of Sefton's acreage and has successfully completed 24 wells. Heartland is also selling gas into the Enbridge system.

Petrol released information in mid 2006 stating One of our areas being developed in Coal Creek is called the Waverly area and is located about 15 miles NE of the Burlington area in Coffey Co. Kansas. Phase I development in the Waverly area began during the first quarter of 2006 and included drilling and completing 19 CBM production wells and 1 SWD well. By mid June, Petrol's new Waverly gas gathering pipeline system was integrated between all 19 production wells and their gas compressor station. Petrol field operations worked diligently with Enbridge Pipeline to emplace a second tap and gas sales monitoring system on the Enbridge interstate pipeline, which ultimately transports Petrol's gas sales from these new Waverly area CBM wells. All 19 Waverly production wells are in various stages of de-watering, and as in Burlington, permeability of the coal beds is manifested by early water production and gas rates are modest but continuously increasing as the fracture system de-waters.

Petrols chairman was quoted as saying The gas-bearing nature of coal beds in southeastern Kansas has been well-documented, and we are confident that production from our Coal Creek project will significantly enhance shareholder value in coming years," which is confirmed by Bruce Mackays comment The opportunities in Kansas are extensive.

Again, far reaching potential for Sefton if they can ever get themselves in a strong financial position or attract financial interest.


Towards the end of 2006, Sefton confirmed that trading for the Group will be in line with its expectations, and that it thus continued to trade profitably, during the second half of 2006. During this period Sefton 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.

Confirmation also that oil production had remained steady at 4000 bopm and continuing upgrades at Tapia would lead to a further 500 bopd handling capability.

Seftoners also received the news that the long discussed steaming was at last about to become reality and that the company had commissioned a steam generator, which was hopefully going to be ready to use by mid 2007. This was built and delivered but various delays meant it would not actually see a well until January 2008.

However disappointing this will have been for investors, its activation will now tie in nicely with the added advantage of additional completed wells, contributing to what should be a very productive year all round for Sefton Resources.

More information was released on Eureka, which showed a steady output of approximately 435 bopm and the completion of the reconnaissance geochemical mapping.
Preliminary data was very encouraging and supported the Board's plans to develop further this field.

Steam generator commissioned
Sustained production and increased handling capacity
Encouraging data which will lead to further development


Due to successful ventures in the vicinity to the West of the companys acreage, Sefton engaged Sure Engineering to conduct some tests which resulted in some exciting results for the company.

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. Sefton owns over 30,000 leasehold acres."

From Petrol Oil and Gas:

THE BOURBON ARCH

The majority of Petrol's lease acreage is in Coffey County, Kansas and Western Missouri. The area is located on the Bourbon Arch, which separates the Cherokee Basin area to the South and the Forest City Basin to the North. The Cherokee Basin has been under active development and production of CBM for nearly a decade with well defined production and reserve characteristics. Through 2003, 674 wells for CBM had been drilled in Wilson and Neosho counties, and 747 wells had been drilled in Montgomery and Labelle counties. This is a total of 1,421 wells drilled in four counties, while the four counties in the Bourbon Arch immediately North, with approximately the same land area, had only 82 wells drilled. A 2004 report by the Kansas Geological Society ("KGS") "Geological and Geochemical Factors Influencing the Emerging Coal bed Methane Play in the Cherokee and Forest City Basins in Eastern Kansas" indicates that coals in the Bourbon Arch may have a higher gas content than previously indicated. The report states that "some shallow coals at less than 700 feet in depth have unexpectedly large gas contents (>100scf/ton) exceeding that of immediately deeper coals." Scientific analysis of gases from a number of test wells suggests that a microbial component to these gases may account for the local enrichment. Because of the layering of coals in the area, several coals can be perforated and produced in an individual well. Another report published by the KGS in 2003 estimates that in the Bourbon Arch, original gas in place may be as large as two-trillion cubic feet. This compares to an estimate of 6.6 trillion cubic feet of total original gas in place for the Cherokee Basin.




So confident that the Bourbon Arch assets were worth time and expense, Heartland Oil stated:
We plan to spend approximately $15 million in 2006. These expenditures will be directed toward developing existing proved and probable reserves on the Bourbon Arch, constructing additional pipelines, and evaluating new project areas.
For 2006, we plan to invest approximately $15 million, or 100% of the budget, in our Bourbon Arch assets. Approximately 90% of the capital budget is focused on attempting to convert probable and possible reserves into proved reserves.
We project 2006 capital program will allow us to create value by drilling 100 net wells and installing 14.5 miles of transportation lines and associated facilities necessary to support the drilling program and to hook up currently stranded gas, compared to the 2005 program in which we drilled 11 wells and installed 5.5 miles of pipeline and associated gas processing facilities. If successful, we believe we can achieve a 2006 exit rate of 3 to 4 gross MMcfgp per day from the Bourbon Arch project. We have currently secured the necessary pipeline right of ways to achieve the 2006 program. We expect production to be 100% natural gas and anticipate funding our capital program from outside financing sources and internally generated cash flow.

So, Seftons acreage and this information 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 is worth its weight in gold once they can get around to eleoping this asset.

It was now that Sefton realized that any move forward was going to require a considerable cash injection and started the process of acquiring financial help from the banks and so we enter 2007, investors yet again waiting patiently for the rewards that had been promised by the company!


2007 started with a surprise change of management which I believe was the catalyst in starting the change of events and long term success of Sefton Resources, a success yet to be realized (2008) but almost certainly to be achieved!

Jim Ellerton stood down as full time CEO and Jeremy Delmar Morgan took on the role. An excellent move in that Jim Ellerton was really more of a hands on man, being a geologist of some acclaim who would be of more benefit to the company in the field, leaving Jeremy Delmar Morgan to begin the task of bringing Sefton Resources more into the limelight in order to attract the interest of the banks.

So began the task of acquiring a facility at a time when borrowing was not at its easiest and terms restrictive.

To attract such interest, there would have to be some pretty impressive forecasts in place, ones that could be verified. Reserves needed to be quantified, additional wells would have to be drilled in order to see the revenue required to service any borrowing, production of existing wells needed to be increased, there were many factors required to be instigated in order to get Sefton looking credible, the management looking credible and the share price more credible.

This would be achieved by placing an experienced city man in charge, getting well permits in place so that drilling could be initiated as soon as the finance was in place, collating the necessary information required to prove additional assets/value from CBM, getting the steam generator on site and producing expanded flow rates from wells that had limited production.

In July, it at last emerged the board changes, the upgrades, the commissioning of the Steam generator and all the other actons were now beginning to pay off.

Jeremy Delmar Morgan released a statement confirming that production had been maintained at the same levels as the previous year, that finance negotiations were at an advanced stage, the steam generator was in place and they had appointed a long awaited finance officer.

He also confirmed If successful, a significant amount of oil resources will move into the Proven Producing Reserves category.

Bearing in mind the reserve estimates had been lowered to a more conservative level, the upside could be huge once the steaming results are out.

When the finance news eventually hit the market, it was a far greater deal than anyone could have hoped for.

Sefton announced that it had reached agreement with the Bank of the West for a $10m line of credit. They agreed an initial $1.5m drawn down, secured on the Tapia and Eureka leases, wells
and equipment. The interest was only placed at an incredible
interest rate of 0.5 per cent over the US Prime Rate, guaranteed for 2 years.

A month later, the company announced with bank financing now in place, which had previously held back Sefton's development, drilling of two new wells and steaming of two others will start in the next couple of weeks and that Sefton are in an excellent position to move forward!

A set back was to follow with the rig though. The operator where the rig was presently residing was having problems, which delayed its delivery and added to this, the steam generator could not be fired up due to the instability of the gas from the chosen well.

However, once that rig arrived, both wells drilled provided a solid flow of oil, yet again, a 100% result in the history of Sefton drilling.

Seftoners are now waiting for confirmation of flow results and commencement of the steaming. Edit: These are now in the public domain and are as expected, if not better.

2008 will no doubt be the year that all the previous actions will all come together, there will be no need for delays due to failing equipment, there will be no handling or storage difficulties, there will be no requirements for cash, the steamer will be powered by local gas or propane and will, as soon as implemented, show a possible massive increase in reserves which in itself will create a far higher value for the company and longevity as an investment opportunity.

CBM potential is very exciting in that it is possible, land that holds some of the best CBM plays in the USA, better than average access to it, a market as soon as it produces and 30 year life spans to each well!

No bear report can delete the facts, facts that speak for themselves.

A bear report now will be based on past history, which is not, as financial institutions are keen to state, an indication of the future.

The author of the bear report stated categorically that it was likely that finance would not be got and even in the unlikely event it was, it would be at extremely unattractive rates. A 100% INCORRECT PREDICTION.

The future of Sefton Resources turned in the past year and due to the way these events were spaced out, few people noticed the bigger picture building.

Look at this little lot and say they will fail?


Surface equipment upgrades
Additional handling capacity
Increased storage ready for increased production
Increased acreage to the portfolio
Oil, gas and CBM plays
CBM land better than one of the major players
First profit reported
Upsurge in sales
Repairs to Eureka wells, giving increased production
Future potential, subject to survey, for remaining 1460 acres
Positive geo-chemical survey results
Attractive finance deal negotiated
Potentially huge uplift to reserves estimate
Steam generator on-site
Sustained production and increased handling capacity
Encouraging data which will lead to further development
Successful drilling of two new wells


The list goes on, it just needs to be put together to see just what the company HAVE actually achieved in the grand scale of things.!

Another poster here by the name of Yas0, or Gondola on occasion, has submitted his 19 page closely typed report (somewhere, although Seftoners cannot find it)which is an historical almanac. It has absolutely no bearing on Seftons future as in the past, this company had nothing in place to achieve everything he states they have failed on.

Readers, new and old, read just what Sefton HAVE achieved this past year and note that no value has been placed on it, when all this news is recognized by the market and new wells are drilled, the reserves estimates highered and steaming is successful, the share price should react sharply.

The latest update is positive, investors are now just waiting for steaming results to confirm the reserves and the potential revenue increases from the additional oil extracted!

"significant progress was achieved during the final quarter of the year"

"strong production increase at the Tapia Field in California"

"excellent results from the two-well drilling programme"

"significant improvement in cash flow"

"three-to-four well drilling programme beginning in February, drilling contract with Kenai Drilling on January 8, 2008 to perform this work"

"moving forward with its steam pilot testing of the Yule #7 and Yule #10 wells, also at the Tapia Field, using propane gas as fuel"


Please feel free to tear to pieces as I am sure one person will do, however, please bear in mind, it is only one posters opinion! "

He must have been up all night.

It's an excellent report, many thanks
Keith

I think you can sum it all up as jam tomorrow which has been the case for the last two / three years. SER are paying for CBM leases for which they have little or no financial capacity to develop. Personally I continue to be disappointed with the snail like pace at which SER crab ever sideways.

Personally I don't call increasing production by 60%+ in December with another 3-4 wells to follow from next month (taking production up conservatively another 50bopd+)? going sideways. The thrust of the article is although on the surface they appeared to do very little over the previous few years, they were in fact laying all the necessary groundwork for when they got the finance in place that they now have.

That's jam that has been delivered and potentially lots more jam to come next month - not exactly too long to wait.

Hardly something to be disappointed about in my view.

But if that's what you enjoy doing - feeling disappointed, then continue seeing everything in a negative light, ignoring Sefton's achievements so far, and pooh-pooh'ing the idea of any achievements to come.

Me, I will continue to be patient and look forward to the management delivering the rapid growth they have promised this year.

And the SP has done what exactly?

Err, drop. My interest in SER has always been the CBM potential, not some diddy little oil fields which hold no surprises. It's taken so long to increase production to be in a position to finance the CBM prospects that any SP value from CBM is probably years away. If you factor in the ineptitude of the management at moving forward at a reasonable lick make that 3-5 years.

I see you have edited your post since my response.

What a totally stupid thing to say, 'enjoy feeling disappointed'?

I'll reserve judgement on 'achievements to come' when they achieve something of note, ie actually doing something that enhances my investment. So far all they have achieved is an ersoion of that investment.

The 'diddy little oil fields' may be unlikely to hold surprises in terms of high impact new reserve discoveries (although you could argue Eureka offers a lot of unexplored acreage which has the possibility of holding deeper high pressure reserves) , but on the other hand they do offer a predictable and relatively low risk path to significant increases in production. For this 5m cap company, producing 250, 300, 350 bopd etc with the economics of the field leads to very high profitability - I wonder whether you have done the sums on this?

The CBM has always been a longer-term play. They have acquired a sizeable acreage in a prime location at low prices. I believe this will be financed by a institutional placing at a much higher price level rather than revenue or debt - as this will be a higher risk, higher reward play. But they have already commissioned an exploratory drilling plan for this year so it may not be as far away as you think.

"What a totally stupid thing to say, 'enjoy feeling disappointed'?"

Then why put yourself through the constant disappointment you clearly feel in holding this stock, if you don't enjoy it?

Surely the sensible thing to do would be either to sell out and end your misery, or change your way of looking at things?

(unless you enjoy not enjoying things of course :)

I enjoy feeling disappointed, also a bit of pain usually with a whip.

I put myself through the 'constant disappointment' with the rather hopeful expectation that SER might actually do something that allows me to escape from this rather ill judged investment at break even.

I don't need to change my view, the success of a company or otherwise is usually reflected in its SP. It's up to SER to alter my stance, not the other way round.

Meantime the SP is at an alltime LOW!

Been in this since just after the blowout, the sp is always down this time of year but will pick up....

See RNS operations update looking good.

To save you guys having to go and find it......


2008 DRILLING PROGRAM

Sefton Resources, Inc., the AIM listed oil and gas production company with
assets in California and Kansas, announces that its wholly owned subsidiary TEG
Oil & Gas USA, ("TEG") has commenced the drilling of the Snow #3 development oil
well. The well is the first in a series of the three to four wells in the Tapia
2008 Q1 drilling program. The Snow #3 well spudded on Sunday, February 3,
2008.

Each of these three to four wells are step-out wells designed to extend the
productive limits of the Tapia Oil Field to both the east and west. The three
Snow Lease wells are anticipated to encounter a thickened section of Yule oil
sand reservoir. The Yule sand productive thickness is mapped at greater than
120 feet for each of the planned three Snow lease wells. Each well will take
eight to ten days to drill and complete.

TEG will evaluate these wells over the coming months and use the data to plan
the next round of drilling at Tapia.

STEAM PROGRAM

TEG is awaiting final approval from the Los Angeles Air Quality Control Board
(AQMD) for firing the TEG steam generator with propane. TEG will commence with
the steaming of the Yule #7 well once this final approval is given. The AQMD
has already given approval for the construction of the steam equipment capable
of burning lease gas, natural gas and propane. This final approval is believed
to be purely an administrative one which TEG is endeavoring to expedite.

Chairman, Jeremy Delmar-Morgan commented, "It has been a good start to the year
with the drilling program now underway. As a result of the planned step-out
wells in 2008 and the drilling in late 2007, our cash flow has improved
considerably. The improved cash flow will allow Sefton to develop its assets
without substantially increasing its debt."


Looks like decent news to me. I even learnt a new word "spudded". What does that actually mean? And if they did it on feb 3rd then I think they should be done with the drilling around the 13th (if they work weekends which they appear to do as the 3rd was a sunday)

Small upward movement in the SP already today. Hopefully this RNS will increase potential buyers confidence in our little oil company.....fingers crossed!

Excellent news. "spudded" is the term for when the drill rig begins drilling the well as you correctly inferred.

Am I correct in saying Sefton have under-promised and over-delivered this time?

It now looks like the company is moving forward step by step, sometimes a slower than we all wanted, but progress is being made
I do agree relishing under-promised and over-delivered

All good stuff I like this bit.

Chairman, Jeremy Delmar-Morgan commented, 'It has been a good start to the year
with the drilling program now underway. As a result of the planned step-out
wells in 2008 and the drilling in late 2007, our cash flow has improved
considerably. The improved cash flow will allow Sefton to develop its assets
without substantially increasing its debt.'

Sefton Resources says TEG unit begins drilling Snow 3 development oil well
LONDON (Thomson Financial) - Sefton Resources Inc said its TEG Oil & Gas USA unit has started drilling the Snow 3 development oil well at Tapia Field in California.

As a result of the planned step-out wells in 2008 and the drilling in late 2007, its cash flow has improved considerably, which will allow Sefton to develop its assets without substantially increasing its debt, the company said.

http://www.hemscott.com/news/latest-news/item.do?newsId=59596966212652

The sp is going well today up 12+% and this is with out any steaming started yet, with more news of the progress of the wells being drilled and further wells to be drilled plus the steaming should keep the momentum of the sp in an upward direction from here on.