Sefton Resources (LSE:SER)
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RNS Number : 6130Y

Sefton Resources Inc

10 September 2015

Sefton Resources, Inc

10 September 2015

Sefton Resources, Inc.

("Sefton" or the "Company")

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.

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2015 02:01 ET (06:01 GMT)