14th Jun 2006 09:10
Sefton Resources Inc14 June 2006 SEFTON RESOURCES, INC. ("SEFTON" OR "THE COMPANY") Final Results for the year ended 31 December 2005 CHAIRMAN'S STATEMENT: This year we have made a good deal of progress, despite a disappointing start inJanuary and February when our drilling programme was delayed because ofexceptional rainfall in California. We have firmed up our asset base and areconfident that this should improve cash flow in due course. Highlights include: •Five new wells at Tapia Canyon Oil Field, California •the acquisition of over 20,000 mineral acres in the Coal Bed Methane Gas producing area of Eastern Kansas •An increase in Oil and Gas sales by 284% to US$2,165,410 (2004: US$563,231) as a result of production from new wells and the increased price of oil. •A reduction in losses of 36% to US$694,464 (2004: US$1,088,986) resulting from an overall improvement and a profit for the second half of 2005. •An increase in the group's Proven Reserves by 60% to 7,588,203 BBLS (2004: 4,743,088) which at the year end have a before tax present value of US$74,206,862 (2004: US$38,388,570) up 94% based on constant costs and the price at 31 December 2005 with a 10% discount factor. Elsewhere, Oil and gas production costs increased 17% to US$469,196(US$402,425), general and administrative costs increased 74% to US$1,885,406(US$1,085,407) as a result of a non recurring write-off of US$300,000 from aninvestment that was not closed and increased staff, offices and associated coststo handle larger operations in California and new operations in Kansas. The wrongful death lawsuit relating to a blowout when drilling a well in theTapia Oil field in 2002 was recently settled with no liability or costs toSefton Resources, Inc. or its subsidiaries and the litigation with the drillingcompany relating to the drilling costs and possible damages is still in process. Currently, we are upgrading surface facilities at our California operations, inorder to handle future production increases and are in discussions to sell TEGOil & Gas Canada, Inc., with the proceeds planned for further development of ourEastern Kansas assets. The company welcomes Harry Barnum to its Board of Directors who replaced KarlArleth to whom we would like to express our appreciation for past services.We appreciate the loyalty our shareholders have shown over the past couple ofyears and it is our belief this loyalty will be rewarded in the coming years,and we look forward to discussing such at the Annual General Meeting on July 10,2006 in London. Jim EllertonChairman and Chief Executive Officer14 June 2006 SEFTON RESOURCES, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSAS OF DECEMBER 31, 2005 AND 2004 December 31, 2005 2004 --------- ---------ASSETSCurrent Assets:Cash and cash equivalents $ 126,109 $ 2,485,513Accounts receivable 347,710 59,200Other receivables - related party 22,517 157,973Prepaid expenses and other assets 47,287 41,914Total current assets 543,623 2,744,600 Oil and Gas Properties, Full Cost Method,net 7,524,772 4,325,195 Equipment and Vehicles, net 50,126 44,756 Total Assets $ 8,118,521 $ 7,114,551LIABILITIES AND STOCKHOLDERS' EQUITYCurrent Liabilities:Accounts payable $ 774,276 $ 438,382Accrued expenses 23,685 2,697Accrued expenses - related parties 79,058 46,871Note payable, current portion 70,191 -Total current liabilities 947,210 487,950 Asset Retirement Obligation 163,111 75,340 Note Payable 601,036 - Note Payable - Related Party 270,160 348,554Total liabilities 1,981,517 911,844 Minority Interest 722,072 - Stockholders' Equity (Notes 1 and 7):Common stock, no par value, 3,000,000,000shares authorized, 1,493,369,500 sharesissued and outstanding 10,922,853 10,922,853Stock subscription receivable (30,047) (30,047)Treasury stock (58,602) -Accumulated deficit (5,483,799) (4,789,335)Accumulated other comprehensive loss 64,527 99,236Total stockholders' equity 5,414,932 6,202,707 Total Liabilities and Stockholders' Equity $ 8,118,521 $ 7,114,551 SEFTON RESOURCES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENT OF OPERATIONS For the Years Ended December 31, 2005 2004 ---------- ----------Revenue:Oil and gas sales $ 2,165,410 $ 563,231 Costs and Expenses:Oil and gas production 469,196 402,425Depletion and depreciation 199,714 166,662General and administrative 1,885,406 1,085,407Loss on fair value of derivative 266,735 -Total costs and expenses 2,821,051 1,654,494 Loss from Operations (655,641) (1,091,263) Other Income (Expense):Interest income 15,421 10,464Interest expense (46,193) (11,203)Foreign currency transaction losses (8,051) 3,016Total other income (expense) (38,823) 2,277 Net Loss $ (694,464) $ (1,088,986) Basic and Diluted Loss per Common Share:Loss per share $ (0.000) $ (0.001) Basic and Diluted Weighted Average SharesOutstanding 1,493,369,500 1,133,348,189 SEFTON RESOURCES, INC. AND SUBSIDIARIESSTATEMENT OF CASH FLOWS For the Years Ended December 31, 2005 2004 --------- ---------Cash Flows From Operating Activities:Net loss $ (694,464) $ (1,088,986) Adjustments to reconcile net loss to net cash usedin operating activities:Depletion and depreciation 199,713 166,662Stock issued for services - 19,349Stock options issued for services - 49,000Forgiveness of accounts receivable to relatedparties 148,000 -Changes in operating assets and liabilities:Accounts receivable (288,510) 40,202Prepaid expenses (5,373) (13,008)Other assets - related party (12,544) (119,447)Accounts payable 335,894 (214,394)Accrued expenses - related party 32,187 25,031Accrued expenses 20,988 (2,381)Net cash used in operating activities (264,109) (1,137,972) Cash Flows From Investing Activities:Purchase of oil and gas properties (3,314,760) (1,274,028)Purchase of property and equipment (25,951) (25,356)Proceeds from sale of oil and gas properties - 23,824Net cash used in investing activities (3,340,711) (1,275,560) Cash Flows from Financing Activities:Proceeds from sale of minority interest insubsidiary 722,071 -Proceeds from notes payable - related party 270,160 -Payments on notes payable - related party (58,602) (22,006)Proceeds from notes payable 416,157 370,000Payments on notes payable (93,484) (48,946)Proceeds from sale of common stock - 4,158,109Collection of stock subscription receivable - 11,432Net cash provided by financing activities 1,256,302 4,468,589 Effect of Exchange Rate Changes on Cash (10,866) 67,768 Net Increase (Decrease) in Cash and CashEquivalents (2,359,404) 2,122,825 Cash and Cash Equivalents, beginning of year 2,485,513 362,688 Cash and Cash Equivalents, end of year $ 126,109 $ 2,485,513 NOTES 1. Financial StatementsThe summary financial statements set out above have been extracted from theCompany's audited financial statements for the year ended 31 December 2005, (notpresented herein). Those financial statements were prepared in accordance withUnited States Generally Accepted Accounting Principles. These summary financialstatements do not constitute financial statements in accordance with UnitedStates Generally Accepted Accounting Principles as they omit substantially allthe disclosures required by United States Generally Accepted AccountingPrinciples. A full set of accounts can be viewed at www.seftonresources.com. The annual report of accounts will be posted to shareholders by 17 June 2006,copies of which will be available from the Company Secretary, Pinsent MasonsSecretarial Services Limited, Dashwood House, 69 Old Broad Street, London EC2M1NR or at www.seftonresoures.com. The annual General Meeting of the Company willbe held 10 July 2006 at Nominated Advisors (NOMAD) London Offices; SeymourPierce, Bucklersbury House, 3 Queen Victoria Street, London EC4N 8EL. 2. Net Loss Per ShareThe Company applies the provisions of Statement of Financials AccountingStandard No. 128, "Earnings per Share" (FAS 128). All dilutive potential commonshares have an antidilutive effect on diluted per share amounts and thereforehave been excluded in determining net loss per share. The Company's basic anddiluted loss per share are equivalent and accordingly only basic loss per sharehas been presented. 3. DividendsThe Directors are not recommending the payment of a dividend. For further information, contact: John James (Jim) Ellerton, Chairman & CEO Tel: 01 303 759 2700Jeremy Delmar-Morgan, Director Tel: 020 874 84066David Millham, Investor Relations Tel: 020 779 69999 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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