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I spent all of yesterday talking to the two lawyers who are assisting me with my defence against the spurious claims made by AIM Listed oil penny dreadful Sefton Resources (LSE:SER) that I have committed libel. Well here is another article for Sefton’s uber expensive City lawyers Pinsent Masons to read for I make fresh allegations today.
I have also today lodged my intention to fight this case with the High Court. And I am keen that battle commences as soon as possible, before Sefton runs out of cash. I do not wish to be denied the chance to see inter alia Jim Ellerton, Doctor Green and the senior partner at Pinsent Masons (company secretary to Sefton) having to give evidence on oath.
In compiling my detailed response I had a great moment. My July 11th moment. In early July I was in Greece or Albania and knew very little about Sefton. I did not in those days watch its RNS releases like a hawk – my first article about this company was after it published an RNS on August 11. And so while I have read its July 11 2012 RNS I had not until yesterday examined it like a hawk nor recognised its significance. For it shows without the slightest doubt Sefton misleading investors on a scale that few folks appreciate. Indeed I had not twigged its full import until yesterday.
Given the ongoing cashburn at Sefton its board of directors must have been planning a fund raise in H2 2012. Clearly, in any libel case we will seek to have internal emails and documents produced which show when Sefton started discussing how it was to raise cash. And against that background its statements to investors need to be examined. Because if it had managed to produce at 200 bopd in H2 then it could plausibly have avoided a fund raising until 2013. If it produced at only the H1 rate (120 bopd) a fund raise was a slam dunk certainty. As it happens it did not even manage 120 bopd in H2. So for investors to get a fair perception of the company’s funding needs output numbers did matter crucially.
Following my comments in September of 2012 Sefton was forced to start issuing monthly output data. Had I not started writing I doubt that it would have done so. Instead it would merely have guided (misguided) investors with irregular trading statements. And that brings me to my July 11th moment. On that day Sefton published a trading update which read:
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.
Obviously Dr Ali’s report is still to appear but it is the first paragraph which caught my attention. What we now know is that this 170 and 200 bopd number refers to just a few days in early July – Sefton ‘fessed up to this on September 25th. But it is that explicit claim of a rising trend which interests me. It may have been true on July 11 if you count a few days as enough data to form a trendline. But…
As we now know output in July averaged 116 bopd and in August 97 bopd. But although Sefton knew that the rising trend had in fact become a falling trend it did not inform investors. Anyone buying the shares after July 11 would have been justified in thinking that output was climbing upwards from 170 bopd. In fact it was plunging. Sefton should have informed investors as soon as it became aware of this. It did not.
Instead on 9th August it talked of having goals of increasing output and on 11th September it stated that “workovers and cyclic steaming continue to deliver production growth” Any investor who noted that output was on a “rising trend” from an average of 170 bopd on July 11 and two months later was told that Sefton was seeing production growth would naturally assume that by mid Sept output must have been way ahead of the “average of 170 bopd” number stated on July 11. But Sefton knew full well that this was not the case. Output in the second half of July, August and September was an average of c100 bopd.
In light of the difference 70 + bopd makes to Sefton’s cash position its failure to update investors is a clear breach of AIM rules. The fact that it not only chose not to update investors but on September 11th positively opted to perpetuate the myth that output was increasing from 170 bopd, is just disgraceful. Yes Sefton you have deliberately misled investors. Go sue me for libel again if you wish. And this article is going straight to the FSA to assist them into their investigation as to whether the directors of Sefton Resources have committed market abuse.
See you in Court bitchez.
Tom Winnifrith is the world’s greatest living expert on the subject of “Sefton Resources and its history of misleading investors.” You can follow him on twitter @tomwinnifrith or read more of his articles at www.TomWinnifrith.com
Tom
Seems ironic now that so many investors may have been duped into buying SER shares following at least one ‘buy’ recommendation from your own t1ps group.
Hi
I never wrote about SER while at tips. If someone else did – more fool them
T
Not suggesting it was you, just one of your employees at t1ps.com
whilst i dont agree with (the way of) what you’ve done against sefton in the past 6mo+ it is actually starting to fall into place a bit more clearly.
i sold up recently at a loss and as such salvaged at 1.2p instead of 0.6p.
i will continue to follow your fight as it does have merit.
what does make me laugh though is your sidekick Daniel who actually is a serial pumper and actually wrote a glowing article urging people to buy sefton last year as it made a small rebound…hahaha so funny that he swiftly deleted that article asif it never existed.
you Tom are actually well known, respected and successful, but your sidekick is your complete opposite.
good luck….you can sit up there against the best and work your magic but i would be fearful that your sidekick doesnt prove to be a less cerebral liability to you.
Frankie
well take it up with them not me. Certainly was not on t1ps itself or any website I had anything to do with. My first article on this stock was august 2012 and certainly not bullish. t1ps site editors had full autonomy over what they wrote.
Tom
Monkey Boy
Dan and I face 2 separate legal claims. His site nothing to do with me and vice versa. We are all allowed to change our mind on a stock if new info comes to light. Dan is a cerebral fellow – we shall see what happens.
T
Sadly, I can’t see this case ever getting to court.
Keep up the good work – and kudos to ADVFN too.