Sefton Resources : General Meetings, Strategic Outlook, Board Change & Company Response to EGM Requisition

General Meetings

The Board of Sefton confirms that, on 8 September 2015, it received formal notice of requisition for an Extraordinary General Meeting ("EGM") of shareholders (the "Requisition") which proposes the removal of Thomas Milne, Keith Morris and Raylene Whitford as Directors of the Company, and the appointment of Clement Chambers as Interim CEO and Michael Hodges as Non-Executive Director of the Company. The Requisition has been made by former interim chairman, Daniel Levi, Christopher Williams and Charnjit Matharu (the "Requisitioners"), who collectively represent 11.29 per cent of the Company's issued common shares of no par value ("Common Shares").

A circular and notice of EGM (the "Circular"), to be held on 6 October 2015, will be published and posted to all registered holders of Common Shares or depository interests in Common Shares ("Shareholders") no later than 21 September 2015. A copy of the Circular will be made available on the Company's website (www.seftonresources.com) and the key elements announced once it is published.

The Company also confirms that it intends to hold its Annual General Meeting ("AGM") on 6 October 2015, to follow the EGM, at a location in London (to be confirmed). Notice of the AGM will be included in the Circular and its accompanying announcement.

Company Position

It is the belief of the Board that Shareholders' interests are best served by the continuance of the Company's current strategy of building a scalable production profile within South East Asia, with an initial focus on Indonesia.

The Board does not believe that Shareholders would be best served by supporting the EGM resolution proposed by the Requisitioners.

The Board notes that the Requisitioners include a previous Executive Director of Sefton who had failed to make certain required disclosures under the AIM Rules for Companies (the "AIM Rules"). It was subsequently revealed in the Times that he had committed serious criminal offences that resulted in 16 years in jail. The Board also notes the presence on the Requisition of Mr. Chris Williams, who was subject to a ruling by the Panel on Takeovers and Mergers on 11 May 2015 in relation to his activity in the shares of New World Oil and Gas plc.

The current Board recognises that long-term Shareholders have suffered a prolonged period of governance issues, however the current Board believes this EGM is an opportunity for investors to make a clean break from the previous legacy and support the strategic repositioning outlined in detail below.

Following consultation with the Board, the Company's Nominated Adviser, Allenby Capital Limited, has informed the Board that while it will continue to act and support the current Board and strategy, it will resign with immediate effect should the EGM resolution be passed and the change of control outlined in the EGM resolution take place. Under the AIM Rules, any company that does not have a Nominated Adviser has its admission to trading on AIM immediately suspended, and if a new Nominated Adviser is not appointed within one month of the previous Nominated Adviser ceasing to act, then the admission to trading on AIM of its shares will be cancelled.

Board Changes

As of today, Jossy Rachmantio, a Non-Executive Director of the Company since 8 May 2015, has been appointed Executive Chairman ("Chairman") of Sefton to continue final due diligence work relating to the anticipated acquisition of potential cost-effective hydrocarbon assets within Indonesia. The value of these assets will be optimised through the Company's application of technical expertise and targeted capital expenditure. As Chairman, Mr Rachmantio intends to build near term revenues and profits in a region with significant domestic energy demands with Sefton's limited resources and continue to strengthen corporate governance within the Company.

Mr Rachmantio, an Engineer by training, has over 25 years' experience in the energy industry. He spent his early career involved in engineering, construction and infrastructure projects in the energy sector in his native Indonesia. Mr Rachmantio has recently been focused in Oil and Gas Exploration and Production in Indonesia. He was a founder and Director of Mitra Energia Limited which was subject to a reverse takeover by AIM quoted Sound Oil plc in 2006. Mr Rachmantio was subsequently a member of the Board of Sound Oil plc from 2006 to 2010, and served as Managing Director of the company's Indonesian operations until Sound Oil's disposal of that part of the portfolio in 2012. Since 2013, Jossy has headed Bunga Mas International Limited which is engaged in Oil and Gas exploration and production in Indonesia, and has been involved in the preliminary screening of various deals in the region.

Mr Jossy Rachmantio, has also informed the Board that he will resign with immediate effect should the EGM resolution proposed by the Requisitioners be passed. Mr Rachmantio's significant experience working in the South-East Asian oil & gas sector, for both UK listed companies and local private entities, represents a significant part of Sefton's ability to secure commercially viable production assets which the Board believes is a key asset of the Company. Mr. Milne's term as a Director expires at the conclusion of the AGM and he will not stand for re-election.

In addition, the Board has identified several new Non-Executive Directors with extensive experience working for major oil and gas companies operating in South-East Asia and with direct responsibility for the development and operation of South-East Asian projects for those companies. The Board believes they would be a valuable addition to the Company and would provide significant assistance in identifying and delivering shareholder value through Sefton's South East Asian strategy, however, they have informed the Board that they will not be prepared to join the Company following the change of control that would occur upon the proposed EGM resolutions being passed.

The Board has a credible, fixed strategy to build revenues based on regional knowledge and technical ability, as well as the drive and commitment to deliver these given the current limited resources.

The Company plans to strengthen the Board further with new appointments following the closure of the first acquisition. Furthermore, Jossy and Raylene will be supported by a Senior Management Team who are currently part of the Due Diligence team employed by the Development Agreement, and who will assist in the implementation of Sefton's new strategy. The Management Team will be announced in conjunction with the rebranding of the Company in the near future.

Raylene Whitford, CFO, commented:

"I welcome Mr Jossy Rachmantio to the position of Executive Chairman, we have had a successful working relationship since he joined in May 2015. I look forward to working with him over the years to come. Jossy has been an integral part of the development of the Company's South-East Asian strategy and his in-depth experience in working with both listed and private oil and gas companies in South East Asia will prove to be vital to Sefton as we progress forward and build strong foundations for growth.

"The Company must take this opportunity to be a true counter-cyclical player and secure real assets to form the basis of a cost-effective production portfolio. We have made solid progress towards this stated objective and I am confident this can be achieved, returning the best value for our shareholders.
"We will continue to press on and build on our work to date which includes assembling a due diligence team with robust credentials and multiple years of in-country experience. We have now concluded two site visits to Indonesia to conclude our technical analysis, assess the potential targets and confirm our economic modelling with the Sellers.

"Furthermore, in my time as a Director, I have substantially reduced the Company's G&A costs, materially reduced the Company's aged payable balances, implemented robust financial controls and strengthened the Company's corporate governance. My time as an Executive Director also saw Sefton entrusted with new shareholder funds to progress our outlined strategy and develop a near-term production portfolio which we continue to pursue today.
"In the same period, we have received litigation and a bankruptcy order from a former Chairman. Furthermore, the Board and shareholders have learned the recent former interim-Chairman had not disclosed his change of name to the Board, nor its Advisors and that he in fact had a serious criminal past. It truly has been a difficult time for Shareholders and I believe that all Sefton investors should have the opportunity to finally realise real value from their Company following the events of the last few years.

"Our evolving Management Team have clearly demonstrated our commitment to delivering real value despite the various legacy issues facing the Company. We have a clearly articulated strategy to build a real production portfolio in a region that, due to its domestic energy demands, commands lucrative price premiums and is partially decoupled from global commodities prices.

"I call on all Sefton Shareholders to support our new Chairman and the current Board as we build a credible oil and gas company with real production revenues and sustainable margins, whilst at the same time protecting shareholders' interests through a clear focus on corporate governance and the creation and retention of shareholder value."

Jossy Rachmantio, Executive Chairman, commented:

"Working for Sefton has been a challenging yet rewarding experience and I am delighted to assume the position as new Executive Chairman.

"This is a crucial turning point for the Company and as we move forward I will continue to explore ways of optimising development and profitability, and evaluate opportunities to secure the Company's longevity and success.

"With the growing domestic demand for energy in Indonesia, the Company is executing its stated strategy of targeting oil and gas opportunities in the region, with the aim to rapidly build a robust, value-accretive production portfolio which is sustainable even at the current depressed oil prices.

"By initially focusing on domestic energy supply to Indonesia, our commercial interests will be underpinned by the country's need for regional energy security and will support local economic growth.

"Furthermore, our thorough approach to technical analysis, economic screening and robust financial Due Diligence which focuses on short-term to immediate cash generation for Shareholders. Furthermore, we are confident that technical enhancement through operational excellence techniques and demonstrating a clear alignment with local Stakeholder's commercial interests, we will deliver value to investors.

"I look forward to updating the market with further developments in the near future."

Strategic Overview

Summary

• Focus on identified scalable assets within Indonesia
• To date have invested c. US$200,000 on due diligence assessment of three potential opportunities
• Technical due diligence is well-progressed - acquisition discussions are underway
• Rename and rebrand of the Company to be proposed at the AGM
• Commercial divestment continues to be pursued in the US

Acquisitions, Optimisation and Development

As a result of the continued weak commodity price environment, Sefton's Management Team are currently screening a number of oil and gas opportunities in Indonesia with a balanced portfolio comprising of 50% existing production, 40% development and 10% exploration. These opportunities include current producing assets which have stagnated and are owned by small local operators who are currently financially distressed. The Board views the recent decline in oil prices as an opportunity to acquire assets at a normal price given the increasing number of depressed operators in the industry.

By focusing on our efforts on domestic energy supply in Indonesia, our commercial interests will be underpinned by the need for regional energy security and will support the country's economic growth, as well as being a natural hedge against the fluctuating oil and gas prices.

The Board has developed a screening process to identify underperforming assets which, through technical optimisation and operational restructuring, will be brought back to profit, even in the current challenging price environment. The primary operational objective for the Company's technical team is to identify assets with potential to increase production whilst rapidly reducing lifting costs, resulting in attractive economics and positive cash flow for investors and stakeholders. Sefton intends to become a true counter-cyclical player in securing near-term cash to alleviate ongoing dilution and, with an established production suite, will be ideally placed to benefit from an increase in oil and gas prices.

South East Asia offers the Company the scale of production whereby real optimisation can produce immediate benefits and sustained margins, especially in a stronger commodity price environment. While management of political and country risk is at the forefront of the Company's development strategy and represents a significant factor in the due diligence process, it cannot be ignored that the region offers compelling opportunities for long term sustainable growth. The Company has already established a well-connected industry network in the region and believes it is well placed to capitalise on the opportunities available in Indonesia as a first step to long-term growth.

Currently the Company is in discussions with a number of third parties, including asset vendors and regional finance houses. The Management Team is currently examining a number of structures and partnerships which will best benefit Sefton shareholders in its present situation.

Why Indonesia?

This strategy is supported by the growing domestic demand for energy and the limited capability of Indonesia's domestic gas fields to keep up with the surging power demand, forcing Indonesia to import from costlier overseas suppliers.

This increase in demand and imports has caused a shift in the country's energy sector towards supplying the domestic market. Energy contractors are therefore obliged to fulfil obligations to supply oil and gas to the domestic market, this is known as the 'Domestic Market Obligation.' This has led to the industry urging the government to do whatever is necessary to kick-start the E&P engine.

These factors, coupled with Indonesia's growing economy driving higher domestic demand for energy, mean that Sefton will be well placed to provide the necessary power to a developing economy with an expanding population.

Due Diligence Process

Management has twice been on the ground in Indonesia and South East Asia conducting a due diligence process on the outlined the above strategy. The Company has spent approximately $200,000 on this process through the Development Agreement, which is now nearing finalisation. The technical due diligence team have identified three potential targets which are prospective opportunities within the strategic criteria. Additional South-East Asian deal flow with a substantial number of opportunities is brought to Sefton by Jossy Rachmantio and Raylene Whitford through their respective networks, which is expected to increase as the region's local operators increasingly suffer.

Rebrand

It is the intention of the Company to undertake a rebranding exercise to reflect the Company's new corporate identity and strategic direction and focus on developing a South-East Asian portfolio. The new brand and the new company name will be detailed in the Circular.

Divestment of the US Assets
The Company continues to keep its legacy U.S. assets on a care and maintenance regime whilst a study on the underlying value of the assets is commissioned. The Company continues to seek potential buyers, however recognises the difficulties in the market due to the current depressed oil price.

Interim accounts
Sefton will publish its interim accounts for the six-month period 1 February 2015 - 31 July 2015 on the 30th of September 2015.

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