Notice of EGM

30 June 2014

Sefton Resources, Inc.

("Sefton" or the "Company")

Notice of EGM and Update Regarding Proposed Refinancing

Further to the announcements of 6 May 2014 and 4 June 2014, the Board of Sefton wishes to advise shareholders of their efforts to re-finance the Group.

· A notice of an Extraordinary General Meeting ("EGM"), together with proxy materials will be posted on the website on June 30, 2014. On the website at www.seftonresources.com there is a link titled "Extraordinary General Meeting 23 July 2014 - Shareholder Vote Required".

o Click on that link to access the Circular and the Form of Proxy/Form of Instruction.

o The EGM is scheduled for July 23, 2014, in Denver, Colorado.

o The Company is investigating facilities to broadcast the meeting via the internet. Both Annual Report and Accounts and EGM circular with proxy materials will be printed and mailed to shareholders promptly after June 30, 2014

· The Company's Bank has agreed to a further extension of the repayment due date of the credit facility, subject to certain conditions, details of which are in the Annual Report and Accounts and the EGM circular.

· Hawker Energy LLC is continuing to work with the Directors to refinance the credit facility with the Bank.

· Subject to approval by Shareholders of the resolutions to be voted on at the EGM, the Company plans to hold an Annual General Meeting in London, UK in late September 2014.

Key extracts from the circular can be found below.

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Extraordinary General Meeting (the "EGM")

1. Introduction

You will find enclosed a notice convening an Extraordinary General Meeting of the Company (the "EGM Notice") to be held at 5.00 pm (BST) (10.00 am MDT) on 23 July 2014 at the offices of the Company at 2050 South Oneida Street, Suite 102, Denver Colorado 80224, USA. The EGM is being convened for the purpose of asking Shareholders to consider and, if thought fit, pass the Resolutions.

Full details of the Resolutions are provided within this document.

On 8 January 2014, the Company announced that it had been unable to agree terms for a renewal of the Old Loan Facility with the Bank, that the Bank required full repayment, and that the Company was in discussion with several parties regarding refinancing. On 6 May 2014 (updated on 4 June 2014), the Company announced that it had agreed on the outline terms of a refinancing, the final details agreed to on 27 June 2014 are described in Section 2 below.

2. The Proposed Restructuring and Refinancing of the Group

The Company has agreed on the terms of a restructuring of its activities and the associated Refinancing with Hawker. The key aspect of the prospective restructuring is that the business (all assets and all liabilities) of TEG USA will be transferred to a new joint venture company, Tapia LLC. Once the refinancing has completed and subject to the passing of the Resolutions, Hawker will hold an 80% interest in Tapia LLC, with the Group owning the remaining 20%. The Refinancing consists of the following elements:

· The "Subordinated Loan" - A loan of up to $1,000,000, advanced by way of a promissory note maturing on 31 July 2014, accruing interest at 3% per annum, secured by a second charge (the Bank has the first charge) on the assets of TEG USA. As at the date of this document the Subordinated Loan has an outstanding balance of approximately $900,000 and has provided interim finance to TEG USA ahead of the EGM, and will be refinanced, subject to the passing of the Resolutions, by the Tapia Investment. On June 27 2014 Hawker and TEG USA agreed to increase the amount available to TEG USA to $1,500,000 and extend the time for repayment to December 29, 2014.

· The "Tapia Loan" - Hawker and Sefton are currently in discussions with several lending groups for the provision of at least $3,000,000 to Tapia LLC by way of a secured loan. The Tapia Loan will in all likelihood be secured by a first charge on the assets of Tapia LLC. The Bank has agreed to extend the repayment of the Old Loan Facility to December 29, 2104 on certain conditions, including a payment of $360,000 made on June 27, 2104, and additional principal payments of $120,000 per month in addition to current interest expense on the last business day of each month beginning July 31, 2014. Hawker and TEG USA will re-finance the Old Bank Facility with a new credit facility in Tapia LLC on commercially acceptable terms including removal of all cross guarantees from the Group.

· The "Tapia Investment" - subject to the passing of the Resolutions, Hawker will invest $2,500,000 in cash into Tapia LLC in exchange for a 36.4% common membership interest in Tapia LLC. Tapia LLC will use part of this sum to repay the Subordinated Loan in full together with all accrued interest and the balance will be used to reduce the Old Loan Facility. Hawker will also purchase from TEG USA an additional 43.6% of Tapia, LLC in exchange for a $3,000,000 promissory note repayable in 12 equal quarterly installments of $250,000, commencing 90 days after the closing of the transaction, accruing interest at 6% per annum, with such accrued interest payable 39 months after the closing of the transaction (the "Promissory Note"). The 36.4% and 43.6% investments will take place at the same time, 31 July 2014, or as soon after as a replacement credit facility for the Old Loan Facility is in place. This would bring Hawker's total ownership in Tapia LLC to 80.0%.

Shareholders should be aware that if the Resolutions are not approved and the Refinancing not completed, the Directors believe that the Bank will in all likelihood exercise its security and commence foreclosure proceedings, including the appointment of a receiver to TEG USA. In such circumstances the Board may seek protection for the Group under Chapter 11 of the United States Bankruptcy Code, that the Company's shares would be suspended from trading on AIM and that there would be a material uncertainty as regards to the future viability of the Group.

3. Background to the Proposals

The Group has been operating the Tapia Field for around 15 years. Studies undertaken in recent years have indicated that there are very significant further quantities of heavy oil that could potentially be extracted from the Tapia Field, but that to do so would require a level of capital investment that is in all likelihood beyond the current capabilities of the Group. In addition, the capital investment requirements of the Tapia Field to even maintain the recent levels of production have proved impossible to finance out of operational cash flows, given the level of debt required to be serviced. The Board began exploring a number of strategic options regarding Tapia during 2013, but the Bank's decision not to renew the Old Loan Facility, accelerated the requirement to take action.

The Board concluded that the Group needed to find a partner who could finance and manage the development of the Tapia Field in order to maximise its potential, while simultaneously refinancing the Old Loan Facility. The Board believes that the Refinancing will achieve both these objectives, and that in the longer term, despite the Company's interest in the Tapia Field (which will now be through Tapia LLC) reducing from 100% to 20%, that Shareholders will benefit from the significant levels of investment that Hawker would make into the Tapia Field. The Group will hold one seat on the four person board of Tapia LLC, with Hawker appointing the other three directors.

The Board has evaluated a number a number of different refinancing proposals as well as conducting intensive negotiations with the Bank. The Refinancing was the only proposal received that both repaid the Old Loan Facility in full (an explicit requirement of the Bank) and provided Sefton with a continued interest in its California assets (which includes the smaller Eureka Canyon field as well as the Tapia Field). On 27 June, 2014 the Bank agreed to extend the time to repay the Old Loan Facility to 29 December, 2014, subject to certain conditions.

4. Fundamental Change of Business under AIM Rule 15

Subject to the passing of the Resolutions, the Tapia Investment and Tapia Acquisition will result in Sefton losing voting and board control of the Tapia Field. This will result in a Fundamental Change of Business, as defined in the AIM Rules, and requires the approval of Shareholders. Resolution 1 is for this purpose.

The passing of Resolution 1 will not result in the Company becoming an Investing Company under the AIM Rules. TEG MidContinent and TEG Transmission will remain wholly owned operating subsidiaries of the Company.

5. Future Strategy

If the Resolutions are approved and the Refinancing completes, the Board plans to convene an Annual General Meeting of Shareholders (the "AGM") in late September, in London, England, to conduct the regular business of the Company. It is the intention of the Board to provide a clear vision of the future strategy of the Group at that time and the strengthening of the Board and management.

In addition to contributing to the future development and management of Tapia LLC, it is the Company's intention to use the additional cash available to it through the quarterly repayments under the Promissory Note to further develop the assets of TEG MidContinent and TEG Transmission in Kansas. Low cost opportunities to develop additional oil production will be the initial focus, to be followed by efforts to develop joint venture pipeline opportunities.

It is also the intention of the Directors to evaluate potential acquisition opportunities.

6. Financial Results

Shareholders are advised to read the Annual Report and Accounts of Sefton for the year to 31 December 2013 which has been published, posted on the Company's website and will be mailed concurrently with this document. A copy can also be viewed at  www.seftonresources.com .

7. Current Trading

The Group is currently producing approximately 115 to 120 barrels of oil per day, principally from the Tapia Field. While sufficient to maintain operations, this level of production does not provide for growth opportunities, loan repayments, preventive maintenance or new drilling and equipment. The Board believes that significant additional capital is required to grow the operations both in California and Kansas, and that such capital levels cannot be achieved from internal sources.

8. Extraordinary General Meeting

Set out at Part V of this document is a notice convening the EGM to be held at 5.00 pm (BST) (10.00 am MDT) on 23 July 2014 at the offices of the Company at 2050 South Oneida Street, Suite 102, Denver Colorado 80224, USA, at which the Resolutions will be proposed for the purposes of implementing the Refinancing. Each Resolution will be proposed as an ordinary resolution and will require a simple majority of the votes cast for it to be passed.

Resolution 1 is proposed to authorise the Board to complete the Refinancing with Hawker.

Resolution 2 is proposed to authorise the Board to do all things necessary to document and finalise the Refinancing.

9. Documents on Display

There are no Documents on Display.

10. Action to be taken

You will find enclosed with this letter a Form of Proxy for use by Shareholders at the EGM. Whether or not you intend to be present at the EGM, you are requested to complete and return the Form of Proxy in accordance with the instructions in the Notice and printed on the Form of Proxy. To be valid, the completed Form of Proxy must be received by Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY as soon as possible and in any event by no later than 4.00 pm (BST) on 21 July 2014 (or, in the case of any adjournment or postponement of the EGM, not later than 48 hours before the time fixed for the holding of the adjourned or postponed meeting). Completion of a Form of Proxy will not preclude you from attending the EGM and voting in person if you so choose.

If you are a holder of Depository Interests, a Form of Instruction is enclosed. To be valid, the Form of Instruction should be completed, signed and returned in accordance with the instructions printed thereon to the Company's depositary, Computershare Investor Services PLC, The Pavilions, Bridgewater Road, Bristol BS99 6ZY as soon as possible but in any event must arrive not later than 21 July 2014 at 4.00 pm (BST).

11. Recommendation

The Board believes that the passing of the Resolutions is in the best interests of the Company and its Shareholders as a whole. Accordingly the Board unanimously recommends that you vote in favour of the Resolutions.

If the Resolutions are not passed by the requisite majority and the Refinancing is not completed, the Directors believe there will be a material uncertainty as to the viability of the Group.

Yours faithfully,

Tom Milne, Keith Morris and Mark Smith

Directors, Sefton Resources, Inc.

DEFINITIONS

The following definitions apply throughout this document, unless the context requires otherwise: