£15 million financing facility agreed

26 June 2012

Sefton Resources, Inc.

("Sefton" or the "Company")

£15 million financing facility agreed

Sefton Resources, Inc. (AIM: SER), the independent oil and gas exploitation and production company with interests in California and Kansas is pleased to announce the signing of a £15 million Equity Financing Facility with Darwin Strategic Limited.

Highlights

·; £15 million Equity Financing Facility has been agreed with Darwin Strategic Limited, a subsidiary of the Alphagen Volantis fund ("Henderson") part of the fund management group Henderson Global Investors.

·; There has been mutual agreement that a £15 million facility would be more appropriate for the Company. A Letter of Intent was signed recently for a £10 million facility. 

Jim Ellerton, Chairman of the Board, said: "We are pleased to have received the support of Henderson Global in our recent placing and to have signed a £15 million Equity Financing Facility (EFF) with Henderson's subsidiary Darwin Strategic Limited.

Sefton has tremendous potential for growth just within its existing assets in California and Kansas. This has been demonstrated in the Competent Persons Reports which have determined a combined £173 million Present Value on these assets (as at 30.12.11); are in the midst of assembling a basket of financial instruments that will provide the funding to allow the Company to make the most of the opportunities that the Board has created.

Alongside the EFF, we are looking to put in place enlarged and more flexible debt facilities as well as industry-related financings such as joint venture financing or farm-out deals to add further to the future financing alternatives available to the Company. 

Moving ahead we expect a good newsflow as in the coming months Sefton will be announcing the results of the Dr Farouq Ali's steam flood report on Tapia, the first revenues from Kansas and updated Competent Persons Reports on both California and Kansas."

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

Equity Finance Facility

The Board is seeking to assemble a basket of financial instruments provided by respected industry partners, institutions and banks in order to fund the growth of the business moving forward. The management team wishes for greater flexibility in funding the development of the Company's assets and have begun negotiations concerning the execution of such instruments.

A £15 million Equity Finance Facility (EFF) agreement has now been signed with Darwin Strategic Limited which is majority owned by funds managed by Henderson. This facility can be drawn down at any time over the next three years; whereby Sefton has sole discretion over the timing, floor subscription price and the size of any draw down. The Company is under no obligation to use this facility; and there are no penalty clauses for lack of use. In addition, the Company may terminate the EFF agreement if certain conditions are not met.

Once the Company makes a subscription notice, Darwin will subscribe and be allotted new Ordinary Shares in Sefton. The Ordinary Shares will be issued at a 5% discount to the average of the three lowest VWAPs (volume weighted average price) of the Ordinary Shares over the 15 trading days following the subscription notice. The Company sets a floor price which serves to restrict the lowest price at which shares will be issued for subscription. The Company has the right to modify the floor price with the consent of Darwin. The number of Ordinary Shares which may be issued under any individual subscription notice is to be up to 400% of the average daily trading volume of Sefton's Ordinary Shares over the 15 trading days preceding the issue of the subscription notice. This may be reduced in certain circumstances, including where the floor price is not maintained, and there is an over-allotment facility available to the Company under which the Company may authorise Darwin at Darwin's discretion to increase the amount of drawdown by up to the aggregate undrawn amount under the EFF.

In addition, Henderson has the option to subscribe for up to 10% of any future placings of Ordinary Shares undertaken by the Company.

The Board is looking at a number of financing options and has chosen the EFF as a key constituent for a number of reasons. Firstly, Darwin is a subsidiary of a Henderson which has taken a 4.5% stake in Sefton following the recent oversubscribed institutional placing. Secondly, our principal broker Fox-Davies Capital will be working with Darwin and the Board on the timing, pricing and placing of any drawdowns. Thirdly, as part of the low set up costs we have issued Darwin warrants to subscribe for up to 3,500,000 Ordinary Shares at a price of 3.25p per share with a three year life.

At present, the management is in the process of negotiating enlarged and more flexible debt funding facilities as well as pursuing industry-related joint venture financing or farm out deals to provide Sefton with additional financing options.

About Sefton

Sefton Resources is an AIM-listed oil and gas exploration and production company with tremendous scope to grow within its 100%-owned and operated assets in the US. The business strategy is to acquire long life, controlling interests, partially developed reserves and add value using our own funds and then maximise shareholder value through asset development involving third party capital, farm-out or merger. Currently the Company has a market capitalisation of approximately £10 million even though independent experts have calculated a Present Value of $278 million (approximately £173 million) for the assets (as at 31.12.11). The board is in the midst of turning this created value into profits by accelerating the development of the assets within its three subsidiaries.

Oil in California - In East Ventura, the Company owns 100% of two oil fields, Tapia Canyon (heavy gravity oil) and Eureka Canyon (medium gravity oil). Estimated 2011 year-end proved reserves stood at 3.8 million barrels. The focus is on Tapia Canyon where Sefton drilled additional wells in 4Q 2011, to increase production and also investigate the use of steam to improve recovery and reserves. The Company has engaged Dr Farouq Ali to advise on a full steam flood development of the Tapia field and the report is expected shortly.

Pipeline systems in Kansas - Three pipelines have been acquired. The two pipelines in Leavenworth County have been refurbished and are in the process of being connected to the Southern Star Interstate Pipeline that will allow the Company to flow gas in due course. Following the completion of the Southern Star interconnect, the priority will be joining the LAGGS and the Vanguard pipelines thereby increasing equity and third party gas into the system. The third pipeline (Waverley) is in Anderson County where the plan is to test, fix and certify this pipeline ahead of negotiating contracts to connect to an interstate system. This move is expected to provide additional redevelopment of oil, equity and third party gas opportunities.

Oil & Gas in Kansas - In East Kansas, Sefton has over 45,000 acres in the Forest City Basin, where Coal Bed Methane (CBM), as well as conventional oil and gas deposits are targets. A planned recompletion program will see oil, gas and CBM wells brought back into production and the leasing program is being accelerated with the plan to double the Company's acreage in Kansas. In the near term the focus will be on oil revenue while gas opportunities are accumulated as part of this accelerated leasing program.

About Darwin

Darwin is an institutional provider of equity based finance for a variety of sectors in the AIM market. Working in partnership with Henderson, Darwin specialises in providing AIM companies with flexible, low cost access to capital. Darwin individually tailors and structures bespoke investments and financings according to each company's need via a broad range of structures.