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I have never tipped – or that I can remember – written about AIM listed oil and gas company Sefton Resources (LSE:SER) and nor have I bought any stock in this penny share hopeful. The history of companies seeking to explore or produce hydrocarbons in the US but listing on Aim is so dire that I simply have not felt the need to seek an association. I cannot say that I know enough to rate the shares – at c2p – a buy or a sell. But an announcement today invites comment. Amid a stack of guff about appointing a new non exec and an operations director we are told:
Fox-Davies’ Site Visit
Recently Sefton’s lead broker Fox-Davies Capital completed a site visit to the Company’s operations in California and Kansas. Fox-Davies intends to initiate research coverage on Sefton in September once the interim results have been announced.
Award of Options
On finalising the £15 million EFF with Darwin Strategic Limited, Sefton agreed to grant Darwin 3.5 million share options which are exercisable at 3.25p over 3 years which has already been announced. Sefton has also agreed to grant Fox-Davies Capital1.5 million share options with the same terms and conditions.
Hmmmm. So let me get this straight, Fox Davies reckons that options at 3.25p are – with the stock at 2p – worth having, otherwise it would not have bothered. And Fox Davies is publishing a major research report in a few weeks. So here is a multiple choice question for you. Will that report conclude either
a) Sefton is a pile of merde and the shares are a sell
b) hold
c) the shares are very cheap. Fill your boots.
Given that the firm has just picked up those out of the money options I will bet you 5000 Albanian Lekke that the answer is a variant of c. I will bet anyone 10,000 Lekke that it is NOT a. So in essence what today’s RNS from Sefton says is “There will be a research report out from a highly respected broker in a few weeks and we are demonstrating to you know that the broker in question thinks the stock is cheap.” If that is not an invitation to front run, I do not know what is.
I have never seen a statement like this. It all reads wrong to me – there is no need to say that Fox Davies has visited the site or will be producing a report so why say it? This is an invitation that I happily decline without hesitation.
Hi Tom,
“There’s no smoke without fire”. In the past, the management of SER had shot themself in the foot with schedules that never panned out! I agree their production levels are not as great as even 2008, but with the steam flooding (cost of steam flooding not released though) to increase production and the gas pipelines anything could happen.
I’m sure, if someone have really done extensive research on SER they won’t go with both option (a) and (c), ‘coz winning the bet won’t even get them a full pizza :) , but with (b).
Thanks,
Siv
Siv
b)? My money is on c) but – 5000 Lekke ( 36 Euro) would get ou quite a few pizzas.
As with all stocks anything could happen. Having looked a bit more, not sure balance sheet inspres me greatly. But I stress that I have not done enough to form a solid view. It was just the odd nature of the announcement that sparked my interest.
Thanks for your feedback.
Best wishes
Tom