News and Press Releases

Company and Trading Update

5 May 2015

 

The board of Sefton (the “Board”) is pleased to provide an update on the Company, its activities and its financial position.

Update on the Kansas Assets

The Company’s primary business assets at present are its two subsidiaries operating in Kansas, USA: TEG MidContinent Inc. and TEG Transmission LLC (collectively, the “Kansas Assets”). The Board continues negotiations over the potential sale of the Kansas Assets (as previously announced on 24 February and 31 March 2015) and hopes to conclude an agreement before the end of June. The Kansas Assets are not currently producing hydrocarbons as current market prices for both oil and gas would not make this profitable, and the assets require significant capital investment to maintain regular production and commence pipeline operations.

Financial results for the 13 months to 31 January 2015

The Board expects to publish its audited annual report and accounts for the 13 months to 31 January 2015 during the second half of June 2015 which will then be followed by an Annual General Meeting of the Company which the Board intend to convene for August following publication of the annual report and accounts. During this period the primary activity of the Company was undertaken by its former subsidiary, TEG USA Inc. (“TEGU”), which was sold following the approval of shareholders at the Company’s extraordinary general meeting held on 30 January 2015. During the period, TEGU produced a total of 28,898 barrels of oil, generating revenues of circa US$2.4m. The Company’s secondary activity was the operation of the Kansas Assets, which produced 2,350 barrels of oil during the same period, generating revenues of circa US$0.1m. The combined loss on disposal of TEGU and the proposed write down of the value of the Kansas Assets is estimated at US$7.5m (the “Impairment Charge”). The Company’s operating loss, before the addition of the Impairment Charge, is estimated to have been approximately US$0.6m. TEGU will be accounted for under International Financial Reporting Standards as a discontinued operation and the Kansas Assets as assets held for sale. As at the end of the period, the Company had cash resources of circa US$27k; as at the end of April 2015, cash resources stood at circa US$507k. The above financial figures are provisional in nature, unaudited and remain subject to possible change during the Company’s audit.

Future board changes & the possible acquisition of oil and gas assets

The Board is currently undertaking a recruitment process for a new Chief Executive Officer (“CEO”), and hopes to announce the appointment during May. Furthermore, the Board continues to explore opportunities regarding the possible acquisition of oil and gas assets in accordance with the strategy outlined in the announcement of 2 February 2015, but have concluded that it would be inappropriate to finalise any agreements until the Company has appointed the new CEO, finalise the Company’s future strategy and the CEO has had the opportunity to analyse and discuss the proposals. As announced on 23 April 2015, the Company intends to also appoint other new members of a non-executive capacity to the Board shortly. In the interim, Mr. Keith Morris and Mr. Tom Milne continue to work with Ms. Raylene Whitford (Chief Financial Officer) on implementing the near term goals.

Raylene Whitford, CFO, commented, “2014 was obviously a difficult year for the Company, but 2015 has brought with it a new level of optimism. I expect the remainder of the year to be time of positive change and significant growth for both the Company and our shareholders. We have firmly turned a corner and have our sights set on a new strategy which will be executed by a qualified team whose primary aim is to deliver value to 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