News and Press Releases

Update on Proposed Refinancing

2 December 2014

 

Further to the announcement of July 16, 2014 (the "Announcement"), and subsequent updates, the Board can now provide the following update with respect to the forbearance agreement with the Bank.

Although the full and final repayment of the loan from Bank of the West (the "Bank") was due and payable on 1 December 2014, Hawker Energy Inc. ("Hawker") has advised the Company that it had not completed its financing to acquire an interest in Tapia LLC, and the Company was therefore not in a position to make payment to the Bank.

The recent decline in crude oil prices, particularly in markets for heavy crude, has hampered lenders and investors in making new commitments. Posted prices for California heavy oil averaged US$68.18 in November, with US$58.37 posted for November 28, 2014. Tapia production is fluctuating in the 100 to 80 barrels per day range, with no steam flood in operation and the new high pressure pump sidelined until it is fully paid for.

The Bank has provided a short period of time for Hawker to table a revised plan to complete the financing. The Bank has not indicated a deadline for their response to a new proposal, however, we expect the time line to be short.

Discussions and negotiations amongst the parties are ongoing.

Visit www.seftonresources.com or contact:

Keith Morris, Director   Tel: 0207 448 5111
Nick Harriss, Nick Athanas, Allenby Capital (Nomad) Tel: 0203 328 5656
Neil Badger, Dowgate Capital Stockbrokers (Broker) Tel: 01293 517744