California Oil Production and Thermal Stimulation

10 January 2013

Sefton Resources, Inc.

("Sefton" or the "Company")

California oil production

and update on the thermal stimulation report

Sefton Resources (AIM: SER), the independent oil and gas exploitation and production company with interests in California and Kansas, is pleased to announce an update on oil production from California and the thermal stimulation report of the Tapia Canyon oil field.

Highlights

·; Preliminary oil production data (tank readings, before estimated 4% shrinkage) for California has been compiled for the month of December 2012 with 4,353 barrels of oil produced compared to 3,422 barrels actually produced for the month of November 2012 (against initial pre-shrinkage estimates of 3,593 barrels).

·; Good progress has been made on the thermal stimulation report on Tapia and Dr Farouq Ali believes that the history match stage maybe completed by the end of January 2013. Once the history match has been achieved, the bulk of the work will have been completed and he can move towards working on the simulation runs.

Jim Ellerton, Chairman of the Board said:

"The board believes that 2013 will prove to be a successful year for Sefton. This is a year when many separate value creating initiatives at our 100%-owned oil and gas projects in both California and Kansas have been scheduled to come to fruition.

California oil production in December 2012 continued the improving trend witnessed over recent months as the Company begins to see the benefits of the acidisation and steaming of the Yule wells ahead of the resolution of the water disposal issues. We look forward to the completion of the thermal stimulation report on Tapia and absorbing the results of this detailed analysis to plan the future development of this field.

This year will see the establishment of two new revenue streams in Kansas from the conventional oil and gas Exploration & Production and natural gas Transmission operations. I look forward to updating investors on the good progress being made in Kansas over the coming weeks."

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

California oil production

Preliminary oil production data (tank data) has been compiled for the month of December 2012. If a 4% shrinkage number is applied, this tank data indicates an estimate of 4,179 barrels of oil produced or approximately 135 BOPD compared with 119 BOPD actually produced in November 2012. The final number will be available after oil sales numbers are provided to TEG USA (Sefton's wholly owned subsidiary) by our oil purchaser (expected in mid-January), in which oil volume is adjusted for any shrinkage to API specification and with basic sediment and water (BS&W) removed. The final production numbers will then be submitted to the Californian Division of Oil, Gas & Geothermal Resources ("DOGGR") for posting on its website. The table below shows the production numbers for the last five months, including the shrinkage percentage.

Net oil production figures reported to the DOGGR

Following the programme of acidising and steaming new Yule lease wells, they are now being produced full-time (while the Snow lease wells are off-line for steaming) which has allowed monthly oil production to continue to improve. The monthly production from the Yule lease over the past 15 months (shown in the following table) has shown a marked recent improvement even with all the downtime from a combination of drilling, steaming/soaking, water disposal and heat handling issues.

Month production from the Yule Lease - Tapia field

The Company is planning to resolve the most critical oil production limiting factor at Tapia by drilling a new water disposal well. A DOGGR permit is in hand for this new well and we are still awaiting L.A. County to provide a permit. A rig is available once all permitting is completed.

Thermal stimulation report

The board is determined to get the best possible thermal stimulation report prepared by acknowledged experts so that the value of Enhanced Oil Recovery (EOR) project at Tapia Canyon can be maximised in negotiations with third parties. The thermal simulation study serves to optimise production and reserve development at Tapia Canyon. In Dr Farouq Ali's latest progress report, he outlined that the history match of the Tapia maybe completed by the end of January 2013. The history match stage involves fine tuning the model to ensure that the model can actively reflect the historical performance of the field since oil production began in the 1950's.

Dr Ali has pointed out that this is an extremely complex reservoir, and that as a result run times on the most powerful computers available takes many days. A number of full length runs have already been completed for the history match stage. Further work is necessary before Dr Ali can provide an accurate timeline for the completion of the steam simulations. Once the history match has been achieved, the bulk of the work will have been completed and then he can move towards working on the simulations runs. At the time of his latest progress report, Dr Ali commented that "I am optimistic about the simulations - as well as the field performance. I feel that this field is producing considerably below its potential." 

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 grow its three projects in onshore United States that are 100%-owned and operated. The business strategy is to acquire long life, controlling interests, partially developed reserves and then to seek maximize shareholder value through asset development using the Company's own funds initially and then involve third party capital, farm-out or merger.

Currently Sefton has a market capitalisation of approximately £6.5 million and was valued by independent experts to have a PV(10) of $278 million (approximately £173 million) based on its assets as at the end of December 2011. The key operational focus at this time is on developing three opportunities in California and Kansas:

Enhanced Oil Recovery (EOR) projects in California

Sefton owns 100% of two oil fields In East Ventura County - Tapia (heavy gravity oil) and Eureka Canyon (medium gravity oil). Estimated 2011 year-end proved reserves stood at 3.8 million barrels. The current operational focus is to fully 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 Consultants (Calgary) to construct a geologic model to be utilised by Dr Farouq Ali, a recognised expert, in a thermal stimulation study to optimise production and reserve development for Tapia. Of all Sefton's operations, Tapia generates the majority of the revenues, at this time.

Exploration and Production in Kansas

In East Kansas, Sefton has a significant and growing acreage position (Leavenworth and Anderson Counties) in the Forest City Basin, where conventional oil and gas deposits as well as Coal Bed Methane (CBM) prospects have been identified. The current operational focus is in Leavenworth County where a workover and recompletion programme is under way that will see oil, gas and CBM wells brought back into production with first revenues from oil whilst additional gas assets are being assembled for the future development as all the pipelines become operational.

Natural Gas Transmission in Kansas

Three gas pipelines have been acquired by Sefton. The LAGGS pipeline in Leavenworth County has been fully refurbished and is now connected to the Southern Star Interstate Pipeline system which allows sales outside the local Kansas market. Plans are to join the Vanguard pipeline to the LAGGS system in Leavenworth County which will increase the scale of this gathering system. This means Sefton is able to transport its own gas as well as third party gas to market and generate additional revenues.

A third pipeline in Anderson County is planned to be connected to an interstate pipeline system in the future to provide additional opportunities for redevelopment of oil, equity and third party gas.