Sefton Resources Next stop Bankruptcy!

by Dan Levi · 30 October, 2012

Where do you start with a company like Sefton resources? A company that has mislead & lied to its share-holders (since the Initial Public offering in December 2000) for 12 years. A company that seeks to silence its share-holders by denying them access to the share-holder register & an in-depth research of its accounts. A company that uses its British Virgin Island registration to obfuscate and deflect away genuine enquiries. A company that has never returned a single penny in dividends or increased value to it’s UK investors. A company that operates for one reason and one reason only. To line the pockets of Jim Ellerton & his Board-room.

In Seftons’ IPO document of December 2000 Jim Ellerton states on page 10; “peak production is expected to be 800BOPD before 2002″ That damning statement is the beginning of the lies & deceit that has pervaded this company from day one. The bopd claims have ranged from 400, 800, 1750, 900 depending on which RNS you read. The much vaunted Tapia Steamflood, cyclical steaming & horizontal drilling go way back to 2000. The buzz words then were, Huff ‘n’ Puff & Steam Assisted Gravity Drainage (SAGD). These claims have been trotted out for the last 12 years with-out any progress whatsoever.

At first glance it all sounds believable I recall meeting Doctor Micheal Green in his office where I was given the “Facts” and like you I believed them it all sounded so plausible I wrote several articles on them, that’s until I began digging deeper and deeper into the company then the cold steel of truth cut deep into me. The California DOGGR individual well figures for Sefton resources are a damning indictment of the mis-management & manipulation of company data. Sefton Individual well figures

What is being said today in 2012 has been said 4/5 times every year since 2000. It is the rotten bait that hooks new private investors into parting with their money.

You can go through every single available RNS since 2000, which is what I have done. The pattern that emerges is a sickening historic failure repeated year upon year. The perpetual cycle of conning investors to part with their money to line the pockets of Ellerton & Co can be clearly read in the myriad of false claims about enhanced recovery techniques via steamflood, cyclical steaming, work-overs, CPR’s, Presentations & rusty rotten pipelines or the new euphemism “re-completion wells” which are basically dis-used exhausted wells.

This is how it works. The company release massaged “improving” oil production figures or buy some leases in exhausted fields such as Kansas or get given free assets such as Eureka Canyon or tell share-holders that the Dr Ali Steamflood report is due or that the LAGGS,Vanguard pipelines are close to completion or some other feel-good news etc The share price rises they then more often than not have a placing leaching more money out of Private Investors; then all that was said falls flat on its face with the company quoting shrinkage, water problems, shut ins, operational matters or the price of gas has fallen and it’s uneconomic to pump gas or the Doctor Ali report is further delayed. They then come out with different excuses as to why this has happened. “False Dawns” are being trumpeted by this company to artificially inflate the sp PRE PLACINGS. These are in fact lies. What is behind the Doctor Ali Steamflood 2 year delay? Why hasn’t the company told share-holders?

Ellerton has blamed Doctor Ali for the delay. Miningmaven 9th October 2012. Ellerton admits that there’ll be no gas pumped through any of the rusty rotten pipelines until 2013, more delay, “it’s uneconomic” Ellerton now says.

From the IPO of December 2000 up to March 2006 there have been 16 placings diluting the share capital by over 1100% netting the Sefton Board over £6,000,000 pounds sterling.

On the 10 July 2006 Sefton announced a “Share Consolidation” of 15 for 1. So for every 15 shares you held you received 1 back! So from APPROX 1,629,158,702 billion shares in issue in 2006 the Board consolidated to approx’ 108,610,58 million.

In the last three years alone there has been a further 10 placings diluting the share capital by another 400%. Current shares in issue are approx’ 512,000,000 million shares. The Board have changed their Articles of Association so that they can now allot any amount of shares. The sky is the limit. It’s the Last Chance Saloon.

The Equity Financing Facility or as it’s known in the City Of London “The Spiral of Death” allows Sefton to further dilute the share capital by up to 1.500,000,000 billion shares at present SP value over the next 3 years. This is unlikely to happen as Sefton are quickly running out of cash.

With a Capital expenditure of approx $20 million dollars for a return of $5 million since 2007 that means Sefton have spent $20 million to return $5 million. A net loss of $15 million dollars. And that’s from 20007! Add to that the $8.2 million dollar debt with Ellertons pension entitlement of $1.6 million dollars and his annual trousering of over $541,000 thousand dollars & his C&J Resources “consultancy payments” along with the cash loans then it is as plain as the nose on a face that the company are desperate to get off another placing or an EFF tranche to shore up their dwindling cash at hand. Ellerton & Arleth accounted for over 44% of the known administrative charges in 2011.

If you research Arleths’ involvement with Sefton you learn that it goes right back to the very beginning of the company. Arleth was named in the litigation papers/court transcripts as the Sefton Agent who contracted Caza in the 18 November 2002 Tapia Field blow out when a Caza employee lost his life.

Indeed if you check out the whole Board you’ll see that they have periodically been in & out of the company at various stages over the last 12 years. Mark Smith on the 3rd July 2006 bought TEG Oil & Gas Canada from Sefton for $450,000 Yes that ‘s the same Mark Smith who is a Non-executive Director in Sefton Resources. ELLERTON STATED at the time; “The value of the assets of TEG Canada was CDN$1,766,025. However prior to the signing of the sale agreement, there was a restructuring such that only the Canadian assets of TEG Canada, valued at CDN$531,455.” How convenient. This was a few months after the company issued 135,789,202 shares to pay for TEG Canada.

The Tapia Field has historically since the 1950’s NEVER ever produced at the rates trumpeted by Ellerton with steam or without. Only once for one month out of 54 years has Tapia produced just over 200bopd. In 54 years Tapia has had one consistent feature. Capex exceeds return. That is why Sefton bought it for peanuts. The capex needed to increase the bopd does not justify the return. It is just like Eureka Canyon basically worthless.

The whole of Sefton Resources has been used by Ellerton, Arleth and their Buddies to line their own pockets. It is their lifestyle that is being funded by you. Arleths Summit Energy has been receiving $12,000 dollars every month for “Consultancy work” Ellertons’ C & J Resources (owned by Jimmy & his wife) has been receiving hundreds of thousands of dollars in “Consultancy fees”. Never mind the bloated Share-options! Expenses include Hotels, Ipads, Laptops, Transport, Flights, Food, Restaurants, Taxis, Accommodation, Mobiles et al. All are being claimed by the Board. It STINKS! You as share-holders are being serially financially raped by this Board.

Today we received a letter from Jim Ellerton attempting to disenfranchise my personal holding. It was on a piece of cheap tacky A4 paper with a blurred Sefton Logo. About as unprofessional as you could get.

Sefton Resources are now the subject of three official complaints. 1/Aim Regulation. 2/British Virgin Island Securities Financial Commission. 3/Official complaint served upon their Nomad Fox Davies. I must point out that Fox Davies have let themselves down here. Fox have a reputation that is second to none in the City of London however their handling of and involvement with Sefton Resources needs to come to an end. *Fox Davies Resigned 31 October 2012*

Sefton have only survived through placings. Sucking in new investors to keep going. If you take 12 years results add them together you come up with a massive loss making company. Sefton resources have never ever in 12 years of operating been at a point or even close to a point where they are self-sufficient. Figures have been, like investors, manipulated.

It is now 12 years since the IPO after approx’ dozens upon dozens of claims of production increasing by various amounts ie 900, 400 ,800, 1750 bopd we are no further on. The value even with consolidation in 2006 has gone from 95p to 1p. Only last week we had an article in the Daily Mail by Geoff Foster. In it Foster quotes Tapia as producing 220 bopd? This is in fact an absolute fantasy. I note that the article has now been removed by the Daily Mail.

Jim Ellerton has pocketed approx’ $7,000,000 dollars in pay, expenses, pension entitlements, consultancy fees, share-options and cash advances. He has returned complete and utter total FAILURE lasting 12 years. The share price already consolidated by 15 for 1 in 2006 is now heading into oblivion. Bankruptcy looms large.

There will always be those that hold on blindly even when they go belly up there’ll still be those that try to blame others.

The simple incontrovertible truth here is that Ellerton has reigned over this company for 12 years pocketing millions upon millions of dollars for recurring failure. The value has plummeted on failure upon failure upon failure. That is FACT. Sefton Resources doesn’t exist to bring share-holder value. It is there to keep Ellerton & his corporate Jackals in the lifestyles they have become accustomed too. A monkey could have run this company better!

It’s time to get rid of this Board. Time is running out fast here. If you want to have any chance of protecting your investment then you need to Join the Sefton ShareHolders Action Group. Failure to do so will result in the total loss of your ever decreasing investment.