RNS Number:8732T
Sefton Resources Inc
06 January 2004
SEFTON RESOURCES INC.
("Sefton" or "The Company")
Results for the nine months ending September 30, 2003 pro-forma for recent
placing, initial testing of gas at Tapia Canyon Field, California and Board of
Directors changes.
Chairman's Statement:
Although a good portion of 2003 was spent recovering from the Yule #6 blowout at
our Tapia Canyon Field, we are ending the year on several positive notes:
Financials:
For the nine months ending September 30, 2003 oil and gas sales were in excess
of that recovered for all of 2002, in addition to both oil and gas production
costs and general and administrative expenses being lower.
The pro-forma September 30, 2003 balance sheet at September 30, 2003 reflects
the November 2003 share placing and illustrates that the current assets and
current liabilities are more balanced than at the June, 30 2003 interim report
stage.
Material events between September 30, 2003 and the November 2003 placing, were a
reduction in some stated payables and the drilling contractors' payables
relating to the Yule #6 blowout being disputed by the company. We intend to seek
recovery of all blowout and related costs by cross claiming against the drilling
contractor in a lawsuit brought by the families of workers involved in the
drilling of Yule #6. Because of the complexity and length of time it will take
to finally settle these lawsuits and cross-claims, it is difficult to forecast
the ultimate economic results, but we will be vigorous in our defenses and
pursuit of our claims.
Initial Testing of Gas at Tapia Canyon:
Although we are still waiting to test the shallow gas zone in the recently
drilled Yule #8 well, this formation was tested west of the Yule #8 well in an
existing oil well on the Snow lease. The test at Snow #1 resulted in a flow rate
of approximately 1.3 million cubic foot of gas per day at a depth of 775 feet.
With the mapping of the shallow gas zone and testing of the Yule #8, together
with this test at Snow #1, we will be able to estimate the extent of these new
gas reserves at Tapia Canyon Field very shortly.
Board of Directors Changes:
With Mr. Ron Klarc unable to be as active a Director as originally thought, the
Board has accepted his resignation and appointed Mr. M.A. (Tony) Ashton to
Sefton's Board of Directors. Mr. Ashton was born in the UK and graduated from
Manchester University with a BSC in Geology. He currently resides in Canada
where until his retirement in 2001, he spent over 10 years with Canada Southern
Petroleum LTD, the last five years of which were as Chief Executive Officer and
President. Ron Klarc will still be associated with the Company as part of a
group of "Specialist Advisors" to the Company - which provides primarily
technical advice and assistance to the Company.
Appointment of Managing Director of TEG Oil & Gas USA, Inc.
With recent events at the Company's California operations, it has become
apparent that a more significant presence is required in California and to that
end, Mr. H. (Harry) P. Barnum of Ventura, California has been appointed Managing
Director of TEG Oil & Gas USA, Inc. He will be responsible for the day-to-day
operations of the Company's California assets.
Harry has degrees (BA and MA) in Geology from the State University of New York
at Buffalo and more than twenty years of industry experience, from six years
with Chevron through several independent firms to his last position with Windsor
Energy Corporation, all in California. In addition to geological work, Harry has
been involved in the management and operational side of the oil business, which
has included business economic evaluations, planning, budgets and projections,
together with hiring and negotiating with service contractors.
Investor Relations Program:
With Mr. Harry Barnum managing the day-to-day operations in California, Mr.
Ellerton will be able to spend more time informing the shareholders and
potential investors of the Company's developments as they occur.
An upcoming mail-out of a VSA research report, June, 30 2003 interim results and
this press release will initiate the program together with web-site updates and
Mr. Ellerton visiting shareholders and others in Canada, Europe and USA during
January 2004.
2004 is expected to be a year of improved financial conditions, evaluation of
additional gas reserves and ongoing development of current oil assets in
California, while also expanding our Canadian operations.
John James (Jim) Ellerton
Chairman and Chief Executive Officer
5 January 2004
Consolidated Statements of Operations and Comprehensive Loss
Nine months Six months
ending ending Year ending
September 30, June 30, December 31,
2003 2003 2002
(unaudited) (unaudited) (audited)
------------ ----------- ------------
Revenues
Oil and gas sales $ 455,461 $ 326,449 $ 454,428
Costs and expenses
Oil and gas production 183,797 106,579 347,981
costs
Depletion, Depreciation & 79,348 65,615 132,494
Amortization
Plug & Abandonment Accrual - - -
(Canada)
General and administrative 522,900 389,366 984,577
expenses ------------ ----------- ------------
786,045 561,560 1,465,052
------------ ----------- ------------
(Loss) from operations (330,584) (235,111) (1,010,624)
------------ ----------- ------------
Other income (expense)
Interest income 991 1,017 1,586
Interest expense (858) (3,523) (570)
Foreign currency (5,371) (5,000) (747)
transaction gains ------------ ----------- ------------
(5,238) (7,506) 269
------------ ----------- ------------
Net (loss) available for
common stock $(335,822) $(242,617) #(1,010,355)
============ =========== ============
Basic and diluted earnings
(loss) per share $(0.0007) $(0.0005) $(0.0034)
Weighted average shares 451,644,500 451,644,500 299,644,500
outstanding ============ =========== ============
Net loss $(335,822) $(242,617) $(1,010,355)
Other comprehensive income
translation
adjustment (50,208) (50,208) (44,781)
Comprehensive loss $(386,030) $(292,825) $(1,055,136)
=============== ============= ==============
Nine months Six months Year
September 30, September 30, ending ending ended
2003 2003 September 30, June 30, December 31,
(Proforma) (Adjustments) 2003 2002 2002
(For Placing) (Nov 03 Placing) (Unaudited) (Unaudited) (Audited)
---------- ------------------- ------------- ------------- -----------
Assets
Current
assets
Cash $ 22,225 - 22,225 288,522 34,063
Stock 824,227 824,227 - - -
subscription
receivable
Accounts 86,159 - 86,159 163,255 147,343
receivable
Other - - - - 318,168
receivables -
related party
Prepaid 22,180 - 22,180 24,327 24,117
expenses and ---------- ---------- ---------- ---------- ----------
other assets
Total current 954,791 824,227 130,564 475,905 523,691
assets ---------- ---------- ---------- ---------- ----------
Oil and gas 3,216,816 - 3,216,816 2,682,533 2,376,510
properties,
full cost
method, net
Equipment and 52,395 - 52,395 47,819 52,395
vehicle, at
cost, net
Other - - - - -
receivables - ---------- ---------- ---------- ---------- ----------
related party
Total assets 4,224,002 824,227 3,399,775 3,206,258 2,952,596
========== ========== ========== ========== ==========
Liabilities and
Stockholders'
Equity
Current
liabilities
Accounts 897,485 (25,326) 922,811 619,729 491,689
payable
Accrued - - - 5,071 5,596
expenses -
related
parties
Accrued 14,927 (40,000) 54,927 99,986 49,584
expenses
Note payable, 9,513 (81,400) 90,913 71,770 80,454
current ---------- ---------- ---------- ---------- ----------
portion
Notes payable -
related party,
current
portion - - - - 35,006
---------- ---------- ---------- ---------- ----------
Total current 921,925 (146,726) 1,068,651 796,556 662,329
liabilities
Note payable, - - - - -
net of current ---------- ---------- ---------- ---------- ----------
portion
Notes payable -
related party,
net of current
portion
- - - - 35,193
---------- ---------- ---------- ---------- ----------
Total 921,925 (146,726) 1,068,651 796,556 697,522
liabilities ---------- ---------- ---------- ---------- ----------
Commitments and
contingencies
Stockholders'
equity
Common stock,
no par value,
1,000,000,000
shares
authorized,
451,644,500
(June 30,
2003),
299,644,500
(December 31,
2002)
shares issued 6,755,589 970,953 5,784,636 5,784,636 5,411,536
and
outstanding
Additional
common shares
subscribed:
75,000,000
(June 30, 2002) - - - - -
Stock (4,903) - (4,903) (19,903) (49,046)
subscription
receivable
Accumulated
other
comprehensive
income (loss) (55,579) - (55,579) (55,208) (50,208)
Accumulated (3,393,030) - (3,393,030) (3,299,825) (3,057,208)
deficit ---------- ---------- ----------- ----------- ----------
Total 3,302,077 970,953 2,331,124 2,409,700 2,255,074
stockholders' ---------- ---------- ----------- ---------- ----------
equity
Total $ 4,224,002 $824,227 $ 3,399,775 $ 3,206,256 $2,952,596
liabilities and =========== ========== ========== =========== ==========
stockholders'
equity
Notes to the financial statements dated 30 September 2003
1. The financial information for the year to December 31, 2002 has been
extracted from the full audited financial statements, for that year.
2. The results for the half year to June 30, 2003 and third quarter to September
30, 2003 are both unaudited.
3. 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 December 31, 2002 and has been approved by the
Directors of the Company.
4. The decision to issue 286,725,000 shares was approved by the Board in
November 2003. The funds for the shares were actually received in November and
December 2003. A pro-forma statement for September 30, 2003 including this
placement has been included.
5. The only material events to occur between September 30, 2003 and the November
2003 share placing for the pro-forma statement has been a reduction of $84,912
from original payables of $139,912 and a dispute involving the drilling
contractor of Yule # 6 blowout (Tapia Canyon Field) in which $196,975 of
payables are disputed. In addition, recovery of costs related to the blowout
will be sought and cross claims filed in relation to a lawsuit involving the
families of workers present during the blowout. Subsequently, bush fires in
California affected production at the Eureka Field, which is currently being
repaired.
6. The long-term receivable of $315,000 reflected on the balance sheet accounts
for a loan made to a shareholder and former operator at Tapia Canyon, secured by
equipment, which was in default. Additionally, there are other items in dispute
that the Company was seeking to recover. The Company proceeded with litigation
with the borrower and settled on terms favorable to the Company, during the
early part of 2003.
7. Canadian oil and gas production costs consist of actual figures for the first
quarter of 2003 and include an estimate for the second and third quarters of
2003. The second quarter estimate is 60% of second quarter gross revenue
accruals and the third quarter estimate is the averaging of all income and
expenses through the period ending September 30, 2003. This cost estimate is
necessary due to a lag in receiving actual revenue and cost data. Production
accruals have been done for the period ending September 30, 2003.
8. There was no dividend paid in the reporting period.
9. Copies of the Interim Statement and third quarter statements will be sent to
shareholders in January 2004. Copies of the Interim Statement will be available
from the Company Secretary: Masons Secretarial Services Limited, 30 Aylesbury
Street, London EC1R 0ER.
For more information, please contact:
Jim Ellerton, Chairman and CEO Tel: +1 303 759 2700
This information is provided by RNS
The company news service from the London Stock Exchange
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