Operational Update

11 July 2012

Sefton Resources, Inc.

("Sefton" or the "Company")

Operational Update

Sefton Resources, Inc. (AIM: SER), the independent oil and gas exploitation and production company with interests in California and Kansas is pleased to announce an update on its operations.

Oil in California

·; Oil production is averaging 170 barrels per day and is on a rising trend as the programme of well workovers and associated cyclical steaming continues with production peaking at over 200 barrels of oil per day.

·; A service rig remains on site and the current programme of well workers and cyclic steaming is expected to lead to further increases in production.

·; Steaming continues to produce elevated results from certain wells ranging from 200% to 300% times their baseline rate.

·; Dr Ali report on simulation studies on the steam flood computer model of the Tapia oil field expected before the end of the summer.

·; California Division of Oil Gas and Geothermal Resources award for excellence received for the fourth consecutive year.

Oil & Gas in Kansas

·; Joint construction of the LAGGS-Southern Star Interconnect is now in progress. Southern Star project management timeline shows an estimated completion and activation date in September 2012; but Sefton is trying to accelerate all construction items under its control, so that the LAGGS pipeline becomes operational as soon as possible.

·; The Company has identified 23 potential recompletion oil and gas wells in the proximity to the LAGGS pipeline. Development of the oil wells will be prioritised so as to deliver first revenue from Kansas.

·; Further 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 which is timetabled for completion by the year-end.

Jim Ellerton, Chairman of the Board, said: "Sefton is entering a period of substantial news flow as a number of the Company's projects are now reaching a critical stage in their development which will see the Group become a far larger business and turn the value that has been created into profits.

We continue to receive a premium to Nymex for our heavy oil in California and the gas price has rebounded strongly with the twelve month future strip price now at the $3.30 level. Certainly futures prices support our positive view for oil and gas prices over the next twelve months as we begin to ramp up production both in our operations in California and Kansas in order to drive revenue significantly higher and greatly improve profitability

Looking ahead, in the next few months, we expect to announce the results of the Dr Farouq Ali's steam flood report on Tapia, Southern Star Interconnect being completed, first oil revenues from Kansas, updated Competent Persons Reports on both California and Kansas, interim results and further operations updates."

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

Oil in California

Production

Although production was less than expected in June due to necessary maintenance work, by the end of the month Sefton had brought back on production the Hartje #12 well (after steaming) along with the Hartje #14 and #17 wells following workovers. Production now averages 170 barrels of oil per day (bopd) and has been on a rising trend with production peaking in excess of 200 bopd. The service rig remains on site and the current programme is expected to lead to further increase in production beyond the Company's targeted 200 bopd. Currently the price received is $92.70 per barrel (a 7% premium to Nymex prices).

Cyclic Steaming

The Company completed the steaming the Yule #7 well in late June and the well has just returned to production. The next two wells to be steamed are Yule #9 and Yule #12 which were drilled in late-2011 but suffered from formation damage by the drilling mud. These two wells will be steamed following the completion of an acid injection/stimulation programme. Next in line for steaming are the Yule #10 and Yule #11. Results following steaming continue to demonstrate two to three times elevated levels of production.

Full steam flood report

All the analysis on the Yule #12 and Hartje #19 cores has now been received and the geologic model of the Tapia field by Petrel Robertson is now completed. Dr. Ali is currently making the final steam flood computer model runs and we now expect the final steam flood report before the end of the summer. The report is a necessary next step in the planning design of the exact steam development pattern, well spacing, and steam facilities sizing from which the detailed capital requirements can be formulated with accuracy. The delays in completing this study have been frustrating, however, accuracy is more important than speed in a project as significant as this.

Wayside Canyon

Drilling activity in the area has been increasing with Vintage Production/Occidental drilling a total of four wells at Wayside Canyon which lies adjacent to Tapia. The DOGGR has reported April production for the Wayside Canyon of just under 270 bopd for the field. Prior to drilling the four horizontal wells this past year, the field averaged just under 30 bopd. The production curve for the first of these horizontal wells (WCU#56H) drilled one year ago shows a steep front-end decline that is typical of a horizontal well in a re-development.

Eureka Canyon

The Board expects to start drilling wells on its Eureka Canyon oil field in 2013. This property comprises of more than 1,500 acres of minerals leasehold and is located in Ventura County. The oil field was discovered in 1893 following the discovery of the neighbouring Torrey Canyon Field where Vintage Production/Occidental's recent Torrey#111 well was drilled to a depth of just over 11,000 feet. Initial production of 182 bopd has been reported with 79 bopd produced in April, after four months of being on production. Vintage has followed this up by drilling the Torrey#112 well where production data has yet to be announced; and it has permits to drill thee more wells in this field.

Excellence Award

Sefton is proud to report that its Californian subsidiary has received an award from the California Division of Oil Gas and Geothermal Resources (DOGGR) for the excellence of the Tapia Field Operations. This is the fourth year in succession that we have won this award. In 2012, the judging was more stringent and a total of only four operators received such awards. In fact, this year the competition was between Operators on a state-wide basis, rather than within the 6 geographic divisions. The announcement was made later than previous year, because of the additional scrutiny involved at the State level.

Oil and Gas in Kansas

Southern Star interconnect

Joint construction of the Southern Star Meter Run and Interconnect is now in progress. The Southern Star project management timeline shows an estimated completion and activation date in September 2012. Sefton is attempting to accelerate all construction items under its control where possible, to work on items parallel with Southern Star so as to accelerate project completion, and thus the date in which the LAGGS pipeline becomes operational.

Recompletion programme

The Company is enlarging its footprint in Kansas with a lease acquisition programme that is being accelerated by the funds raised in the recent placing. A total of 23 potential recompletion oil and gas wells have been identified in the proximity to the LAGGS pipeline including 12 oil wells. Our consultants are currently evaluating well logs of the acquired wells in order to prioritize the recompletion program.

Priority is being given to oil wells which are capable of providing the first revenues. At the moment, our team is carrying out remedial work on these leases so that the oil wells can be brought into production and this includes installing new tanks, lease clean-up, repairing access roads, general roustabout work, reconnecting the electrical supply and replacing electric motors and pumps.

Joining LAGGS and Vanguard pipelines

Work on the Vanguard pipeline is nearly completed and will be followed by certification. The Vanguard pipeline lies 2.5 kilometres away from the LAGGS-Southern Star system and is scheduled to be joined before the year-end. Ahead of that time, further existing wells will accumulated as more leases are acquired. Sefton has commenced discussions with suppliers of third party gas which the Vanguard pipeline would allow to get to market.

Expansion of the pipeline system

Sefton has well advanced plans to further extend its gas pipeline infrastructure to support the expansion of its oil and gas production in Kansas. Additional potential pipeline development projects include:

·; Repairing and re-activating the Vanguard sales line into the Southern Star storage area (southwest of the LAGGS/S. Star interconnect)

·; Reactivation of the Waverly facility and pipeline system in Anderson County between the end of 2012 and mid 2013.

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.