SER.L Regulatory News (SER)

09 April 2013

Sefton Resources, Inc.

("Sefton" or the "Company")

California Oil Production

Sefton Resources, Inc. (AIM: SER), the independent oil and gas exploitation and production company with interests in California and Kansas, announces monthly oil production from California.

Highlights:

·; Oil production figures for California reported to the California Division of Oil, Gas & Geothermal Resources ("DOGGR") for March 2013 are 3,208 barrels of oil which equates to 103 barrels of oil per day (BOPD), compared with February's actual production of 2,918 barrels of oil which equates to 104 BOPD. 

·; A revised figure of 2,918 barrels of oil was reported to the DOGGR for February 2013, once a production calculation error was realised. The error arose from tank levels being carried over from January spreadsheets that were not re-adjusted when the Company's various tanks were evacuated, cleaned and tested during the DOGGR AB1960 testing program.

Commenting today, Jim Ellerton, Chairman of the board said:

"We regret the initial over estimate of production for February, which included non-saleable fluids in error. We have reviewed and revised our processes to avoid this happening again. Oil production at Tapia is now beginning to improve following a period of mandatory tank repairs in the first few months of the year. Cyclic steaming is continuing to increase production levels. The portable steam generator has now moved to the Hartje lease where it will be steaming some of the biggest producing wells in the field which our operating team believe could show an excellent response to heat stimulation."

For further information please visit www.seftonresources.com or contact:

Oil production

Oil production figures for California reported to the DOGGR for the month of March 2013 were 3,208 barrels of oil which equates to 103 barrels of BOPD.

The comparable final production figure for February 2013 was 2,918 barrels of oil which equates to 104 BOPD. On 5 March 2013 the Company reported an initial pre-shrinkage estimate of 3,443 barrels of oil being produced for February, equivalent to 118 BOPD after estimated shrinkage. This revised figure of 2,918 was reported to the California Division of Oil, Gas & Geothermal Resources ("DOGGR") for February 2013 once a production calculation error was realised. An error arose from tank levels being carried over from January and not re-adjusted when the Company's various tanks were evacuated, cleaned and tested during the DOGGR AB1960 testing program on the Lackie, Snow, Yule and Eureka leases. The use of incorrect tank levels at the beginning of the month resulted in higher than actual production readings at the end of the month, and included waste fluids in the production numbers.

Production has been restricted since January 2013 by tank testing and repairs that were required by new State of California regulations for operators with inspection overseen by the DOGGR. The regulations required that tanks be emptied of liquids to conduct wall thickness measurements which has disrupted oil production during this process, as wells have been shut in for partial or complete day cycles.

The table below shows the production numbers for the past eight months, including the shrinkage percentage.

The shrinkage number was larger than normal in February due to the work associated with tank cleaning and testing procedures on the Lackie, Snow, Yule and Eureka leases.

Net oil production figures reported to the DOGGR

Note: March final numbers are being submitted to the DOGGR and will be posted on the website shortly thereafter.

February was a short month, and the Company was continuing tank testing that started in January and continued into February and March.

Cyclic steaming

Snow #3 and #4 were returned to production in February after steaming, and are showing a response to steaming. Collectively they are producing 15 to 20 BOPD versus 4-5 BOPD before steam. Snow #5 was returned to production in late March and is now beginning to produce oil after the initial days of water production after steam. The steam generator has now moved to a position on the Hartje lease from where six wells can be steamed, some of these wells are the better producers for the field. A number of these wells have not been steamed before and our operational team believe that these could show an excellent response to the heat stimulation.

In accordance with the guidelines of the AIM Market of the London Stock Exchange, Jim Ellerton, Chairman of Sefton Resources, Inc. a qualified geologist with over thirty years oil & gas industry experience, is the qualified person as defined in the London Stock Exchange's Guidance Note for Mining and Oil and Gas companies, who has reviewed and approved the technical information contained in this announcement. Jim Ellerton has also relied on primary information supplied by staff and third party consultants in carrying out his review.

About Sefton

Sefton Resources is an oil and gas exploitation and production company with significant scope to grow its three projects in onshore United States that are 100%-owned and operated. The business strategy is to acquire long life, controlling interests, partially developed reserves and then to seek maximize shareholder value through asset development using the Company's own funds initially and then involve third party capital, farm-out or merger.

Currently Sefton has a market capitalisation of approximately £3.2 million and a dramatically higher unrisked PV(10) proved reserves and unproved resources value. The key operational focus at this time is on developing three revenue sources from California and Kansas:

Enhanced Oil Recovery (EOR) projects in California

Sefton owns 100% of two oil fields In East Ventura County - Tapia (heavy gravity oil) and Eureka Canyon (medium gravity oil). The current operational focus is to develop Tapia with an active well drilling and work-over programme in conjunction with the use of cyclic steam production enhancement. Sefton engaged Petrel Robertson Consulting to construct a geologic model to be utilised by Dr Farouq Ali, a recognised expert, in a thermal stimulation study to fully optimise production and reserve development of the Tapia field. Estimated 2011 year-end proved reserves stood at 3.8 million barrels, and the 2012 year-end proved reserves and unproved resources figures and the status of the thermal stimulation study by Dr Ali are planned to be announced in the coming weeks. Of all Sefton's operations, Tapia generates the majority of the revenues at this time.

Exploration and Production in Kansas

In East Kansas, Sefton has a significant and growing acreage position (Leavenworth and Anderson Counties) in the Forest City Basin, where conventional oil and gas deposits as well as coal bed methane (CBM) prospects have been identified. The current operational focus is in Leavenworth County where a workover, recompletion and leasing programme is under way that will see oil, gas and CBM wells brought back into production with first revenues from oil whilst additional gas assets are being assembled for future development as all the pipelines become operational.

Natural Gas Transmission in Kansas

Three gas pipelines have been acquired by Sefton. The LAGGS pipeline in Leavenworth County has been fully refurbished and is now connected to the Southern Star Interstate Pipeline system which allows sales outside the local Kansas market. Plans are to join the Vanguard pipeline to the LAGGS system in Leavenworth County which will increase the scale of this gathering system. This means Sefton will be able to transport its own gas as well as third party gas to market and generate additional revenues. A third pipeline in Anderson County is planned to be connected to an interstate pipeline system in the future to provide additional opportunities for redevelopment of oil, equity and third party gas.