SER.L Regulatory News (SER)

1 August 2013

Sefton Resources, Inc.

("Sefton" or the "Company")

Update on Thermal Simulation Report

and California Operations

Sefton Resources, Inc. (AIM: SER), the independent oil and gas exploitation and production company with interests in California and Kansas, announces an update on the thermal simulation report and operations in California.

Highlights:

·; Thermal simulation report on the Tapia Canyon oil reservoir will be delivered to the Company in draft form by Dr Farouq Ali in a meeting with the Company's California operational team on Friday 2nd August.

·; Ongoing cyclic steaming of wells on the Hartje lease is continuing to show positive results and tank readings for California reveal oil production averaging in excess of 170 barrels of oil per day in July 2013. Oil production continues to be limited due to water handling issues with some wells being run part time.

·; The Company has acquired a 100% Working Interest and 100% Net Revenue Interest in a neighbouring lease with two marginal oil wells that can be converted into water disposal wells. Being able to dispose of more produced water should allow oil production to be further increased at Tapia.

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

"Oil production in California continues to show a good improvement despite the current water and heat related limitations. The restrictions on oil production caused by insufficient water disposal capacity are expected to be solved by the acquisition of the new lease, and wells therein.

With the thermal simulation report now completed in draft form, our operational team will sit down with its author Dr Ali to review and determine if it meets our objectives and explore whether any additional scenarios ought to be investigated.

The Company intends to continue to improve oil production at Tapia Canyon while the team gears up for an intermediate stage towards full development by acquiring a larger more powerful steam generator whilst planning the design and implementation of the full steam flood operation."

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

Thermal simulation report

The thermal simulation report is to be delivered to the Company in draft form by Dr Ali in a meeting on Friday 2nd August with Sefton's California operational team. This will give the team the opportunity to ensure that the report meets the Company's objectives and provides solid recommendations that Sefton can use to move forward by introducing a larger more powerful steam generator for an expanded cyclic steaming programme while undertaking the detailed planning for the full field steamflood development.

It is for these reasons that the thermal simulation report has been designed not only to determine the viability for a full steam flood of the Tapia field, but also the viability of an expanded cyclic steaming programme as an intermediate step. For the full steam flood, the operations team will ensure that the Company is given clear guidelines on steam injection capacity required as well as the patterns for both the injection and recovery wells. This information will allow the Company to begin the comprehensive design work for a full field steamflood project and gauge the necessary permitting and capital requirements going forward.

Cyclic steaming

Ongoing cyclic steaming on the Hartje lease is continuing to add to the level of oil production as more Hartje wells come on stream and further Hartje wells are cyclic steamed.

Oil production has been rising and tank readings for the first 29 days of July 2013 show an average in excess of 170 barrels of oil per day (BOPD). It should be noted that these tank readings are made in the field and that final production numbers will be available after oil sales numbers are provided to TEG USA (Sefton's wholly owned subsidiary) by our oil purchaser, in which oil volume is adjusted for any shrinkage to API specification and with basic sediment and water (BS&W) removed. (Shrinkage has averaged 3.8% over the first six months of 2013). Final oil production figures for California for July 2013 will submitted to the California Division of Oil, Gas & Geothermal Resources ("DOGGR") to be posted on its website.

Water disposal facilities

The Company has agreed to acquire a 100% Working Interest and 100% Net Revenue Interest in a neighbouring 10 acre parcel of land known as the Brandon lease for a total of $34,000. This lease has two marginal oil wells that can be converted into water disposal wells and help alleviate the water handling issues that the Company is currently experiencing.

An agreement has already been made with the surface owner of the Brandon lease to dispose of water and provide access for oil and gas operations. A title check is being made to ensure that there are no liens or encumbrances ahead of completing these transactions.

Once the necessary permitting has been granted (conversion to water disposal wells), the plan is that produced water would be piped to the existing Hartje #9 disposal well and these new water disposal wells. A significant cost saving is expected to be gained by not having to drill or complete a new water disposal well; and being able dispose of more produced water should allow oil production to be further increased

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 develop its three major areas of interest in onshore United States. Sefton's business strategy is to acquire long life, partially developed reserves with controlling interests, and maximize shareholder value through asset development using the Company's own funds initially then involve third party capital, farm-out or merger. At this time, Sefton operates all its assets, the majority of which are 100% owned.

Currently Sefton has a market capitalisation of approximately £4 million and a higher PV(10) value for its unrisked proved reserves and unproved resources. The key operational focus at this time is on developing three revenue sources from both California and Kansas:

Enhanced Oil Recovery (EOR) projects in California

Sefton owns 100% of two oil fields in the East Ventura Basin, California - 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 simulation study to fully optimise production and reserve development of the Tapia field. Tapia generates the majority of Sefton's revenue at this time and has 2012 year-end estimated Proved Reserves (P1) of 3.5 million barrels.

Natural Gas Transmission in Kansas

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

Exploration and Production in Kansas

In North East Kansas (Forest City Basin), Sefton has a significant and growing acreage position (Leavenworth and Anderson Counties) where conventional oil, gas and coal bed methane (CBM) prospects have been identified. The current operational focus is in Leavenworth County where a workover, recompletion, surface equipment replacement and leasing programme is under way that will see oil, gas and CBM wells brought back into production. Initial revenues are from oil whilst additional gas assets are being assembled for future development as pipelines become operational. Estimated 2012 year-end Proved Reserves (P1) for the Leavenworth portion of our Kansas assets are 82,653 barrels of oil and 2.06 Bcf of gas; and total unrisked Proved Reserves and Unproved Resources of 832,485 barrels of oil and 14.4 Bcf of gas for the same area.