SER.L Regulatory News (SER)

8 Sep 2009 07:00



Sefton Resources, Inc.

("Sefton" or the "Company")

Unaudited Half Yearly Results for the Six Months to 30 June 2009

Highlights

Cash flow positive in depressed market

Bank facility not impaired during uncertain times

Development of California and Kansas assets continues

Chairman Jeremy Delmar-Morgan pointed out that the group's financial position remains strong - even during these times of commodity price fluctuations - providing the ability to continue development of its assets, although at a conservative pace, until drilling costs and natural gas prices moderate.

Chairman's Statement

The Company spent approximately $2 million on developing its assets ($3 million for comparative period in 2008), despite the fact that oil and gas prices are significantly lower than this time last year. Additionally, the Company remained cash flow positive during the six month period to 30 June 2009.

Cyclic steaming at our Tapia oil field in California will continue in September using purchased natural gas (thus conserving our own gas until prices are significantly higher) now that all permits, equipment and contracts are in place for such.

We expect to steam two wells per month over the next year, prior to designing a steam plant for continuous steaming.

Putting necessary infrastructure in place in Eastern Kansas, rather than drilling wells is a more cost effective way at this time of furthering our assets in this area. To this end, "closing" for the Vanguard pipeline acquisition is scheduled for early September, as the required agreements have been executed and due diligence completed.

We believe that natural gas prices will again realign with oil prices in the not too distant future and provide the Company with an additional revenue source for organic growth of its assets and those complimentary to its core areas.

During this time of uncertainties in oil and gas prices and costs, the Company believes there will be opportunities to strengthen and expand its core asset base (California and Kansas) and possibly increase its overall size via acquisitions and/or mergers of compatible assets - without impairing our capital structure and financial condition.

Historically, the company's overall investment plan of:

Acquiring partially developed reserves - emphasizing long life;

Target areas located near existing markets, industry friendly and with available support services;

Control of assets (over 50% working interest and operation);

30% or greater annual rate of return on investment; and 

Ability to use updated and modern technology;

Has served us well and will be our guide as we move forward.

A recent release (24 August 2009) will provide greater detail of our operations and can be found on the company's website (www.seftonresources.com).

Financials (unaudited)

Oil and gas revenue and production costs decreased to $1,312,221 ($2,594,873) and $263,889 ($406,387), resulting in a decrease in profit to $1,048,332 ($2,188,480) from oil and gas operations for the six month period to 30 June 2009.

After general and administrative costs of $760,067 ($934,126) and interest costs of $86,530 ($75,318) a decrease in cash flow to $201,735 ($1,179,042) was realized from the first six months of 2009.

Additional "non-cash" expenses for depletion and depreciation ($213,700 versus $148,500), share-based compensation ($101,500 versus $126,179) and retirement liabilities ($90,000 versus zero) resulted in a net loss of $203,465 compared to a profit of $904,363 for the comparative period in 2008.

Improving our investor relations and company profile is a key focus for the remainder of 2009 and throughout 2010 which will enhance these aspirations of growth during this time of opportunity.

Management believes it has the assets and financial ability to grow and expand during the coming year and we have appreciated everyone's support during these recent times.

Jeremy Delmar-Morgan

Chairman

8 September 2009

Enquiries:

Jeremy Delmar-Morgan, Chairman, Tel: 07789 004 874

John James (Jim) Ellerton, CEO, Tel: 00 1 303 759 2700

Nick Harriss/Wye-Li Long, Blomfield Corporate Finance Ltd., Tel: 020 7489 4500 (Nomad)

Daniel Briggs/Alan Rooke, Religare Hichens, Harrison plc, Tel: 020 7382 4450 (Broker)

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Cash Flows

Notes to unaudited consolidated half yearly results

1. The financial results for the half-year to 30 June 2009 and the comparatives to 30 June 2008 are both unaudited. The financial information for the year to 31 December 2008 has been extracted from the full audited financial statements. The financial statements can be viewed at www.seftonresources.com.

2. The financial information included in this document has been prepared on a consistent basis and using the same accounting policies as the audited financial statements for the year to 31 December 2008 and has been approved by the Directors of the company.

3. There was no dividend paid in the reporting period.

4. Copies of the Interim Statement will be sent to shareholders in October 2009. Copies of the Interim Statement will be available from the Company Secretary, Pinsent Masons, CityPoint, 1 Ropemaker Street, London EC2Y 9AH.