AGM Statement

14 June 2012

Sefton Resources, Inc.

("Sefton" or the "Company")

AGM statement

At today's Annual General Meeting of Sefton Resources, Inc. (AIM: SER), the independent oil and gas exploitation and production company with interests in California and Kansas, the Chairman of the Board, Jim Ellerton will discuss the following items.

Highlights

·; £2 million (before expenses) of new equity raised in May via a placing through Fox-Davies Capital Limited and Dowgate Capital Stockbrokers, accelerates our plans to expand our leasing and recompletion programmes in Kansas and continuing on-going work in California, allowing for a faster build-up of oil and gas production.

·; Oil production was maintained at 140 barrels of oil per day in May and is expected to increase as more wells are worked over, recompleted or cyclic steamed now that a rig is on site.

·; Steaming continues to produce elevated results as demonstrated by the Yule #5 well which post-steaming steadily produces at 200% - 300% times the baseline rate. 

·; The complete set of core data has now been received and the updated geologic and reservoir model of the Tapia oil field is expected to be fully completed this week and then sent onto Dr Farouq Ali for his final steam sensitivity runs.

·; 16 potential recompletion oil and gas wells have been identified in the proximity to the LAGGS pipeline in Kansas for development and more wells are being added as leases are acquired and brought into play by the joining of the Vanguard pipeline to the LAGGS-Southern Star system.

·; The initial oil revenue from Kansas is expected to begin in the summer, followed by gas revenues once the LAGGS-Southern Star interconnect work is completed.

·; £10 million Equity Financing Facility Letter of Intent has been signed with Darwin Strategic Limited, a subsidiary of the fund management group Henderson Global.

·; The management within the group, primarily at the subsidiary level, has been reorganised to be more cost effective and efficient.

Jim Ellerton, Chairman of the Board, said: "Sefton has substantial growth potential based on its existing assets in California and Kansas which has created a sound platform of cashflow on which to grow a far larger national and international oil and gas business. The pace of progress at Kansas is being accelerated as the Company acquires further acreage and gains more wells for the recompletion programme. Once the Southern Star interconnect is operational, some contingent resources and possible reserves are expected to move to the proved reserve category and we intend to revise the Competent Person Report to highlight the uplift in value and reserves. In the second half of 2012, the Company plans to embark on joining the Vanguard pipeline to the LAGGS-Southern Star network which should also serve to further upgrade our reserves and allow additional production to be brought on stream.

Now that we have a rig on site at Tapia Canyon field in California dedicated to workovers, recompletions and associated cyclical steaming, on-going work at Tapia will allow oil production to increase towards reaching our targeted levels of over 200 barrels of oil per day. The complete set of core data has now been received on recently drilled wells and the updated geologic and reservoir model of the Tapia oil field is expected to be fully completed this week. This will allow Dr. Ali to carry out the final steam sensitivity runs. I am looking forward to reporting the results of Dr Ali's analysis.

Our work in London has led to an association with Fox-Davies Capital as both Nomad and Principal Broker and the Company is quite excited about this relationship as Fox-Davies is well-known in the investment community amongst institutional investors and specialises in the resources sector. In our view Fox-Davies has a strong performance record and excellent research which we believe will help Sefton to expedite its plans for growth.

As Sefton moves forward to the next phase in the development of the Company, the Board is seeking to realign the management to make the team more effective operationally as well as being cost effective. The Competent Persons Reports have demonstrated the potential value and scope for growth that lies within our existing assets and we are moving ahead rapidly with our strategy to turn this created value into profits. Having our key personnel oversee the projects within our subsidiary companies eliminates a tier of management, and provides a leaner management structure which should ensure that the drive for growth comes hand in hand with improved profitability and cost effectiveness."

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

California

Oil production was maintained at approximately 140 barrels of oil per day in May, 2012; and is expected to carry on rising as production increases from both the on-going cyclic steaming, recompletions and well workovers. The oil price received is currently standing around the $93 per barrel which represents an 8% premium to the NYMEX.

A workover rig is finally on site. Following the replacement of the liners at the Hartje #14 and #17 wells, the rig will then move to two older wells (Hartje #6 and Hartje #7) that also require liner work. Certainly Hartje #6 well has been idle for some time and the team will be seeking to deepen the well to target a fault repeated oil zone which lies below the original completion. The programme of workovers is expected to increase oil production and make additional wells available for cyclic steaming which in turn will provide a further uplift in oil production.

The team is currently steaming the Yule #7 well and will then move to the Yule #9 and Yule #12 wells which will both be acidized prior to steaming in order to clean up any formation damage that may have occurred during the drilling of these wells in December of last year. Steaming continues to produce elevated results which is well demonstrated by the Yule #5 well which post-steaming continues to operate at 200% - 300% times the baseline rate which is the sort of result we expect from the upcoming wells we plan to cyclic steam.

The Company has now received the complete set of detailed analysis from Core Lab of the cores collected from the Yule #12 and Hartje #19 wells. This data have been provided to Petrel Robertson for modifying the geological model which will then be sent to Dr. Farouq Ali for the final steam sensitivity runs. The geologic model now contains approximately one half million grid cells, each containing an updated inventory of geologic and engineering parameters required for accurate steam modeling. On this basis, it is expected that the Board will be able to report the results of Dr Ali's analysis ahead of the announcement of the interim results for the six months to 30 June 2012 (Dr Ali believes he will have results for Sefton in 6-8 weeks).

Kansas

Sefton has delivered the land rights and assignments for the Southern Star-LAGGS interconnect and meter run to Southern Star which is currently in the midst of obtaining Federal Energy Regulatory Commission approval. Construction work by Southern Star on the interconnect is expected to begin shortly. Once it can be demonstrated that gas can get to market the Directors expect some contingent resources and possible reserves to move to the proved reserve category.

Initial revenue from Kansas is expected to commence in the summer from the recompletion of oil wells which is to be followed by gas revenues once the Southern Star interconnect has been completed and sufficient production capacity (from additional recompletions and third party deals) has been put in place. The team has now assembled a total of 16 potential recompletion wells in the LAGGS recompletion program which are either on existing owned leases or leases that are currently being acquired. Several wells are potential oil completions and the remaining are gas recompletions.

It is planned to join the Vanguard pipeline to the Southern Star-LAGGS system as soon as possible after LAGGS-Southern Star interconnect is completed. This will allow for the transmission of potential third party gas and additional potential equity gas volumes to the Southern Star interstate sales point. Once this system is complete and operational we then move to the Waverley pipeline and processing facilities in Anderson County which we expect to become operational in late- 2012 in much the same manner as the Leavenworth project is being developed. At the same time the Board is also looking at other pipeline acquisition opportunities in this region.

The exploration programme is focusing on areas in the vicinity of the LAGGS and Vanguard pipeline systems where the priority at this time is to acquire leases with existing oil wells followed by potential gas wells which when added to the existing interests will improve the Company's assets in this area of Kansas. These prospects and others to be added are on the back of a study of "prototype" fields by Dr Nafi Onat and "trend surface analysis" and "paleorestoration mapping" work by the Company and will provide future growth for our Kansas assets through additional oil and gas production and reserves. 

Future financing opportunities

To fund the growth of the business moving forward, the Board is seeking to assemble a basket of financial instruments provided by respected industry partners, institutions and banks. The Company is in the midst of putting such instruments in place which will provide the management team with greater flexibility in funding the development of its assets.

A £10 million Equity Finance Facility (EFF) Letter of Intent has been signed with Darwin Strategic Limited which is majority owned by funds managed by the Henderson Volantis Capital Team. This facility can be drawn down at any time over the next three years; where Sefton has sole discretion over the timing, 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. A further announcement will be issued upon execution of a formal document.

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.

Improved Management Structure

Sefton has already established a sound platform for growth and is currently in the process of accelerating its development plans helped by the new basket of financial instruments that the team in London has been negotiating. A more hands-on management structure has been put in place to ensure that our best people are in right place to effectively manage the Company's three divisions. Sefton has selected its most experienced petroleum engineers and proven executives to have primary responsibility and be accountable for driving the growth of each of the Company's three wholly-owned subsidiaries in an efficient and cost effective manner.

The Board believes that such a structure serves to make sure that its best teams are in place to manage these businesses during a transformational period. Certainly this structure is designed to provide really effective management but with a rigorous approach applied to costs. As the business grows there will be some additional roles that will need to be filled. At the same time the Board is seeking to strengthen its board with the appointment of additional Non-Executive Directors and discussions have already begun with a number of potential candidates. The new management structure for the subsidiaries is shown below.

Oil in California

TEG USA has a 100% interest in the Tapia Canyon and Ventura oil fields in California where the highest priority is to continue to increase production and review the implications of Dr Ali's forthcoming study. In addition, the Company plans to further develop its Eureka oil field from late-2102 onwards. Experienced petroleum geologist Harry Barnum will continue to be responsible for the Company's oil interest in California supported by Bill Yates who is the Operations Manager. Consultants used to provide specialist expertise including engineers Reed W. Ferrill and Dr Farouq Ali.

Oil & Gas in Kansas

TEG Midcontinent has over 45,000 acres in the Forest City Basin, where the targets are oil, gas and coal bed methane; where the highest priority is the acquisition of leases and wells with the initial emphasis on acreage that offers the potential for generating oil revenue followed by gas opportunities. Jim Ellerton, Chairman of the Board, will be responsible for overseeing this subsidiary supported by Larry Culbertson who is the Operations Consultant. Additional expertise is provided by consultant Dr Nafi Onat.

Pipeline infrastructure system

TEG Transmission LLC owns the Vanguard, LAGGS and Waverley pipelines in Kansas. Karl Arleth will be overseeing this business. In order to concentrate on the opportunities that these transmission facilities will offer, Karl has given up the position of Group CEO but remains on the Board as a Non-Executive Director. He will be supported by Larry Culbertson in the role of Pipeline (Manager). Karl will be responsible for ensuring the Southern Star interconnect to the LAGGS pipeline is completed, followed by the joining of the LAGGS and the Vanguard pipelines as well as redeveloping equity gas and third party gas into the system. His responsibility also extends to the development of the Waverley pipeline system and negotiating a tap/transportation agreement/interconnect into a major pipeline system as well as exploring third party gas opportunities. Consultants currently being employed include a Land man and a Gas marketing agent.

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 third party consultants in carrying out his review.

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 £10 million even though independent experts have calculated a Present Value of $278 million (£173 million) for the assets. The board is in the midst of turning this created value into profits by accelerating the development of its three projects.

Oil in California - In the 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 this 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 which 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 is in Waverley and Anderson Counties where the plan is to test, fix and then certify this pipeline ahead of negotiating contracts to connect to the interstate system; a move which is to be followed by redevelopment of oil, equity (Company-owned gas) and third party gas opportunities in late-2012.

Oil & Gas in Kansas - In East Kansas, Sefton has over 45,000 acres in the Forest City Basin, where coal bed methane, 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.