9 October 2012 Armourers Hall, City of London Directors Jim - PowerPoint PPT Presentation

AIM: SER 9 October 2012 Armourers Hall, City of London

Directors Jim Ellerton – Chairman of the Board, Sefton Mr. Ellerton has over 30 years of multi-discipline experience in the development and evaluation of oil and gas prospects throughout the major basins of North America. He has major oil company background (Texaco) and independent company start-up and management experience, and is one of the original founders of Sefton Resources. Karl F. Arleth – Non-executive Director, Sefton Mr. Arleth comes to Sefton from Blue River Resources LLC, a Denver-based private oil and gas start-up firm engaged in the acquisition and development of U.S. producing properties. He has over 30-years of domestic and international oil and gas experience, including 22 years at Amoco and BP. Mark R. Smith – Non-executive Director, Sefton Mr. Smith currently is sole practitioner of law at Mark R. Smith PC in Calgary, Alberta Canada and has been involved in the energy industry for over 20 years. He has in-depth knowledge of securities law, mergers and acquisitions and oil and gas transactional law and serves on a number of boards and subcommittees of both private and public entities. Tom G. Milne – Non-executive Director, Sefton Mr Milne is a senior financial and management executive with extensive international experience in energy E&P, Pipelines, Oilsands and Communications Technology. He has been Chairman of the Audit Committee for an AMEX-listed Oilsands company; and is currently a Director of TSX-listed Hillcrest Resources Ltd and Canshale Corp (a private company). * We will be adding additional non-executive Directors 2

Company Overview  London Stock Exchange AIM Code: SER.L  Shares Outstanding: 512 MM (30/6/12)  Management Ownership: 10.0% (approximately)  YTD H/L: 4.70p / 1.50p  Market Cap. / EV 1 : £8 MM / £12 MM  3-Month Average Daily Volume 2 : 8,000,000 shares/day CA  2012 Current Production: 150 BOPD 100% Oil CO  Core Areas: California / Kansas KS Denver HQ  Acreage Gross / Net: 51,772 / 51,772 Heavy / Medium  Proved Reserves (31/12/11): 3.8 MMBO Crude Oil (100% oil / 44% PD) $138 MM PV-10 @ $102/Bbl Oil & Natural Gas Forest City  Prospective Contingent & 1.97MMBO + 55.78 BCF Basin Possible Resources $140MM PV-10 @ Ventura Basin 100% WI / $95/bbl and $2.50/mcf 100% WI / 90% NRI 87.5% NRI  Potential Pipeline Value $24MM PV-10 @ $1.25/mcf  Fiscal Year End: 31 December 1 EV = Enterprise Value (Debt + Equity) – at 1.5p/share 2 Source: yahoofinance.com 3

Our Strategy • Acquire long life, partially developed reserves with controlling interest • Favor shallow reserves with good access to market and infrastructure • Politically stable environment with a minimum Internal Rate of Return (IRR) of 30%+ • Acquire core assets towards the bottom of the commodity price cycle • Develop core assets with own funds, operate and retain high WI% • At an appropriate time, leverage remaining growth potential using third party capital • Accelerate growth through acquisitions • Maximize shareholder value through asset disposals and/or farm-outs at the top of the commodity cycle or through merger • Keep investors informed through a strong Investor Relations program 4

Consistent Growth in Results Cash Flow From Operations Oil Revenue ($M) ($M) $2.5 $5.0 $2.0 $4.0 $1.5 $1.0 $3.0 $0.5 $2.0 $0.0 -$0.5 $1.0 -$1.0 $0.0 2004 2005 2006 2007 2008 2009 2010 2011 2004 2005 2006 2007 2008 2009 2010 2011 Lifting Costs* ($/Bbl) Capital Expenditures ($M) $40.00 *2011: $18/bbl lifting costs with no disruption of production. $35.00 $5.0 $30.00 $4.0 $25.00 $20.00 $3.0 $15.00 $2.0 $10.00 $5.00 $1.0 $0.00 $0.0 2004 2005 2006 2007 2008 2009 2010 2011 2004 2005 2006 2007 2008 2009 2010 2011 5

Ventura Basin California 1 mile N Tapia Steam Flood Analog JV & Acquisition ----- Targets Tapia Field Eureka Canyon Field  Steam flood exploitation project (Yule Zone)  Development exploitation project (marine/miocene  Sefton controls 262 gross and net acres Sandstones)  100% WI and 90% NRI  Sefton controls 1,510 gross and net acres  19 wells on production making ~120 BO/d  100% WI and 83.3% NRI  Cyclic steaming throughout 2012  4 wells on production making ~10 BO/d 5 remaining infill locations 2 remaining infill locations    OOIP 11 MMBO  At least one wildcat well, from geology/geochem  2.5-acre spacing with 1-acre down-spacing data potential  27° API sweet crude 6

Tapia Field Economics Per-well EURs Type Well Assumptions Bbls 200,000 Working Interest: 100% 175,000 Net Revenue Interest : 90% 50.0% 150,000 Completed Well Cost: $850,000 to tanks Up to 70% 125,000 Well-head Oil Price: $100.00 Bbl @ wellhead 100,000 21.7% of OOIP API°: 17-19 75,000 Operating Costs: $18.00 Bbl 50,000 15.0% 13.3% Production Taxes: 6% - $6.00 Bbl 25,000 0 Trucking: Offset by quality adj. Primary Cyclic Steam Total EUR High Case Royalty: $6.50 Bbl Recovery Steaming Flood EUR* * High case dependent upon steam response G&A $35 (@150 Bopd) Total Deducts $65.50 Net Back: $34.50 Bbl Gross Reserves/well 140 MBO (assuming 50% rec.) Net Reserves/well 136 MBO 7

Tapia history/development I • Always has been a secondary/tertiary recovery project • Water disposal system/improved completion techniques (gravel pack) • Drilling/ongoing surface facility upgrades • Pilot cyclic/continuous steam programs • Thermal stimulation study (geologic model) – Intermediate step – enlarged cyclic steaming – Power plant requirements/development scenario(s) • Upgrade surface facilities/permit(s) – Water disposal/tanks etc – Expansion loops in the flow lines – Unitization of field (and permits) 8

Tapia history/development II • Enlarged cyclic steaming program – 2 nd /3 rd steam generator – Water treatment facilities • Full steam flood – Power plant – Drilling of injector/collector wells • Operation awards • Remain cash flow positive 9

Tapia Expected Growth 10

Dr. Farouq Ali / Petrel – Tapia • Geologic & Engineering Model has 50 layers and 500,000 grid cells • Each grid cell contains detailed engineering values that are modeled in the steam simulation • Drilling program locations are a good fit with modeled engineering parameters • Currently undergoing upgrade based on data from new wells drilled 11

Forest City Basin Kansas Leavenworth County  CBM and conventional oil and gas potential  Shallow horizons shut-in due to lack of infrastructure  Sefton controls 7,000 gross and net acres  100% WI and 87.5% NRI  Targeted acquisition potential  Midstream infrastructure: SER controls 50 miles of pipeline (Vanguard, LAGGS)  Los Angeles County Anderson and Franklin Counties CBM and conventional oil and gas potential   Shallow horizons  Sefton controls 43,000 gross and net acres  100% WI and 87.5% NRI  Net coal thickness exceeds basin average Midstream infrastructure: SER controls 22  miles of pipeline and 10MMCFD gas plant 12

Leavenworth Midstream Vanguard Pipeline LAGGS  26 miles of pipeline  Access to interstate Cholla pipelines/potential gas Assets storage  Third-party gas can be transported LAGGS Pipeline  20 miles of pipeline  Access to interstate pipeline  Adjacent wells being acquired  Potential for Sefton equity gas and third party gas transport Gas Storage Major Interstate Facility Pipeline 13

Leavenworth Upstream  Primary objective: conventional oil & gas  Secondary objective: CBM  Both exploration and acquisition (local) opportunities 14

Kansas Prospects Mississippian Erosional Surface  Identified by “3 rd order residual” mapping  Multiple drilling objectives - 3 types of hydrocarbon trapping mechanisms  Proven reserves for each trap type in eastern Kansas  Current mapping shows many similar prospect corollaries in proximity to Sefton’s pipeline system Mississippian Channel Buried Sands Truncation Erosional Traps Hills Surface 15

Kansas Exploration & Development Present Day Structure Map 1 2 3 IDENTIFICATION OF PROSPECT DRILLING TARGETS USING 3 RD ORDER RESIDUAL ANALYSIS (LEAVENWORTH) 16

Kansas Exploration & Development 3 RD ORDER RESIDUAL MAP  Maps paleo-surface  Identification of productive wells in relation to surface  Geologist correlates with reservoirs Results in acreage acquisition,  high-grading & prospect development 17

Sefton Reserves & Resources Value Summary* (31/12/11) • Oil: ¡ ¡5708 ¡MBO ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ • ¡ ¡ Gas: ¡ ¡56 ¡BCF ¡ • Total ¡undiscounted ¡value ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ • ¡ ¡Total ¡PV10 ¡value ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡$529 ¡million ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡$253 ¡million ¡ * US GAAP price of $102 per barrel as of 31/12/11 (average price for the preceding 12 months). 18