(SER) Sefton Resources

Sefton Resources, Inc.

("Sefton Resources" or the "Company")

Pre-close Trading Update

Sefton Resources (AIM: SER), the independent oil and gas exploitation and production company with interests in California and Kansas, is pleased to announce the following trading update.

Highlights:

·      Three new wells on the Tapia oil field in California are in production, with initial flows improving as expected which should stabilise within the next 30 days, at which time relevant data will be announced. 

·      A workover program of certain wells at Tapia and the recommencement of cyclic steaming is expected to provide a further increase in oil production.

·      Data from core sampling is being incorporated into the geological model of the Tapia oil field to allow Dr. Farouq Ali to complete his simulation studies.

·      Vintage Production LLC, an Occidental Petroleum Corporation subsidiary, is about to drill a fourth well in the oil field adjacent to Sefton's Tapia Canyon oil field.

·      Kansas pipeline project remains on track for completion with first gas sales expected by mid-year 2012.

·      An updated Competent Person's Report on Sefton's Kansas interests as of 31 December 2011 is to be published during Q1 2012.

·      Proved and possible reserves independently estimated by Reed W. Ferrill & Associates Inc. as of 31 December 2011 are expected to be published in the Q1 2012.

·      Directors have bought today a total of 7.1 million common shares increasing their combined holdings to 10.63%.

Jim Ellerton, Executive Chairman, commented today:

"We are now seeing an increase in the oil production at Tapia following the drilling of the three new wells and we expect these increased flow levels will stabilise over the coming weeks ahead of a further increase in production as the workover program of certain wells is completed and we recommence cyclic steaming. In Kansas, 2012 will be the year that we begin to really benefit from the pipeline infrastructure we have acquired and are making operational from which we expect to start generating cash flow by mid-year 2012.

We now have in place a solid base of assets which will generate long term and highly visible earnings from both California and Kansas and will position us very well to achieve continued organic growth and to accelerate this through selected further acquisitions."

For further information please visit www.seftonresources.comor contact:

Oil in California

Following the drilling of three new wells at the Tapia Canyon oil field during November and December 2011, all new wells are operational and producing oil. Initial oil production is improving but so far the level of production has been highly variable as the rate of production has yet to stabalise.  Revised production data will be available within the next 30 days. 

The Company will be meeting with service companies in the next weeks to arrange workovers on two to three wells that have been shut-in pending down-hole repairs.  These include replacing the corroded liners with stainless steel in Hartje #14 and #17, and recompleting the Hartje #6 well. Returning the Hartje #14 and #17 wells to production will provide additional primary oil production and also will make available two additional wells for cyclic-steaming.  These wells have not been steamed in the past and adjacent wells showed excellent response to the cyclic steaming process.

The cyclic steaming program will recommence in late January on the Yule #5 well and Hartje #12 wells.

Cores collected from the Yule oil sand in both the Yule #12 well and the Hartje #19 well are currently being analysed for porosity, permeability and oil saturation and the findings will be given to Dr. Ali Farouq and Petrel Robertson Consulting (Calgary) later in January. The geological model of the Tapia field will be updated with all this information, a process which is expected to be completed by March 2012, following which Dr. Ali will able to complete his simulation studies.

Proved and possible reserves independently estimated by Reed W. Ferrill & Associates Inc. as of 31 December 2011 are expected to be published in the Q1 2012.

In the second half of 2011, Vintage Production LLC, a subsidiary of Occidental Petroleum Corporation, the fourth largest Exploration and Production Company in the US, drilled a total of three horizontal wells at their Wayside Canyon oil field which is immediately adjacent to Sefton's Tapia Canyon field. Vintage has now permitted a fourth well at Wayside Canyon and a rig has arrived on site.

Gas pipeline infrastructure in Kansas

Following the execution of the Construction, Ownership and Operating Agreement with Southern Star signed on 21 November 2011, the Company is preparing to construct the interconnect, metering facilities and sales lines and it is expected this will commence in spring 2012 once the harsh winter in Kansas has ended.

Currently, the operational team is confirming right of way and easement requirements for the interconnect and meter run construction. The approval of easements, landowners' notification and Federal Energy Regulatory Commission (FERC) approval is expected to occur approximately at the end of March, 2012.

The North LAGGS and West LAGGS portions of the pipeline system have already been operationally certified with ongoing certification work on the Vanguard pipeline now 50% completed. Discussions are continuing with potential third party gas providers and this pipeline project remains on track for completion with first gas sales by mid-2012.

The acreage acquisition and exploration programs are continuing with the priority of acquiring oil leases as well as acquiring leases with gas wells that can be brought back into production economically by low cost workover programs.

The Competent Person's Report being produced by Dr. Nafi Onat on the reserves in Kansas, as of 31 December 2011, is expected to be updated and published in Q1 2012.

Directors buying shares

In a private transaction today, the Directors have acquired a total of 7,132,546 common shares at a price of US$0.02 per share.

*C&J Resources, Inc. Pension Plan

About Sefton

Sefton Resources is an AIM-listed oil and gas exploration and production company. Its two main areas of activity are the East Ventura Basin of California, where it owns 100% of two oil fields, Tapia Canyon (heavy gravity oil) and Eureka Canyon (medium gravity oil), and East Kansas with over 45,000 acres in the Forest City Basin, where coal bed methane, as well as conventional oil and gas deposits, are targets.