News and Press Releases

Provisional Agreement for the Sale of the Kansas Assets

30 June 2015

 

The board of directors of Sefton (the “Board”) is pleased to announce that the Company has reached a provisional agreement with a third party to sell all of the assets and liabilities of Sefton’s two wholly owned subsidiaries: TEG MidContinent Inc. and TEG Transmission LLC (the “Kansas Assets”) for a cash consideration of US$400,000 (the “Agreement”). The Agreement will result in the third party buyer assuming all immediate plugging liabilities for all wells, which, if borne by the Company, would cost in excess of US$500,000 in Q3 2015.

If the Agreement results in a completed transaction, this move will signal Sefton’s exit from all operations in the US, which will be a significant moment in the turnaround of the business.

Completion of the sale of the Kansas Assets remains subject to, inter alia, Sefton and the buyer of the Kansas Assets entering into definitive sale and purchase agreements as well as approval by Sefton shareholders at a general meeting of the Company. Should the transaction proceed the Company will be disposing of its entire existing trading business and, accordingly, the Company would be re-classified as an investing company under Rule 15 of the AIM Rules of Companies. Sefton would also be required to adopt an investing policy which would need to be approved by shareholders in a general meeting concurrently with the sale of the Kansas Assets.

Further details will be provided as the situation progresses.

Commenting on the Agreement, CFO Raylene Whitford said:

“This is a significant milestone for the Company and is consistent with our stated strategy to refocus our business outside of US, where we are already progressing exciting opportunities.

We are wholly satisfied that the proposed consideration for the Kansas Assets is at fair value, especially when the sizeable impending plugging liabilities for which Sefton would be committed to fund are considered. Furthermore, the assets require significant investment in the region of the current cash available to us on the balance sheet in order to bring the asset back to its peak production profile of circa 11bopd. This is not where Management sees the long term value for our Shareholders.

The Board is in unanimous agreement that this agreement is in the best interest of all of our shareholders and that the monies generated from the sale will be well deployed in supporting our defined growth strategy based on the acquisition of producing assets around which we can generate long-term value for our shareholders.”

Visit www.seftonresources.com or contact:

Raylene Whitford, Chief Financial Officer Tel: 020 7872 5570
Nick Harriss, Nick Athanas, Allenby Capital (Nomad) Tel: 020 3328 5656
Nick Bealer, Cornhill Capital (Broker) Tel: 020 7710 9612
Ben Romney, Buchanan (PR) Tel: 020 7466 5132