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The responsibility for this blog posting lies under contract with me and me alone and so in asking Sefton Resources PLC (LSE:SER), its chairman Jim Ellerton and its IR man Michael Green to explain why they have not told lies via RNS statement, I invite them to sue me personally if they feel I am being unfair. I shall see you in court and it will be my pleasure. Should Sefton and the two gentlemen mentioned above not take legal action investors can draw their own conclusions.
So Jim, Michael and Sefton PLC explain why you have not lied to investors?
Your statements regarding production in California have been shown to be misleading twice by me on these pages, here and here
The most recent RNS by Sefton on this matter was, in my view, an outright lie. On 11th September it stated:
“Although oil production for the first half of 2012 at 21,755 barrels or an average of 120 barrels of oil per day (bopd) was higher than in the comparable period (19,968 barrels or an average of 110 bopd in 1H, 2011), there were several factors that served to restrict oil production. Encouragingly, since this period ended we have seen production in excess of our targeted level of 200 bopd and average in the vicinity of 170 bopd over a limited period”
By 11th September the Sefton board must have been aware of what output was in July and August – something we also now know from official data from the State of California: viz 116 barrels per day in July and just under 97 barrels per day in August. I suppose that it is possible to construct a scenario where some days production is greater than 200 bopd and for limited periods it averages over 170 bopd and still over a month averages 97 bopd. But that implies that for decent periods production is actually pretty close to bugger all bopd. Perhaps the company might care to publish via an RNS its daily output statements for July and August to show how what it actually said was not deliberately misleading.
If Sefton, Ellerton and Green which to sue me on the grounds that they did not lie about production but merely misled investors that is fine, I cannot see that I will be paying out much in damages. I look forward greatly to our day in Court. If we ca make it the High Court we can walk back to The Real Man Pizza Company for a meal afterwards. Sefton can pay ( in cash not shares).
But in order to adopt a belt and braces approach, I invite my pals to explain why this is not a slam dunk lie. On 23rd November 2011 Sefton announced via an RNS:
Drilling of four new wells began at Tapia Canyon on Wednesday 16 November and is expected take approximately five weeks to complete. Oil production in early 2012 is expected to rise by up to 75% to an estimated 240 barrels of oil per day, once the new wells are on stream.
Needless to say, as with every RNS from Sefton, it promised the delivery of Dr Ali’s report on steamflood economics by the “end of the year” – i.e. within 37 days. We are still waiting. I remind you that we first heard about Dr Ali and his work on a report that assessed the economics of a company changing programme back in October 2010 when Jim announced via RNS:
Additionally, Sefton recently retained Dr. Farouq Ali, an expert in steamflood design, and president of Edmonton, Alberta-based HOR-Heavy Oil Recovery Technologies Ltd. He has worked on over 200 oilfields throughout the world and is a well-respected expert on thermal recovery of oil. TEG is very pleased to be working with someone of Dr. Farouq Ali’s caliber in the technical review for possible implementation of a steamflood at Tapia oilfield as well as the evaluation of the primary oil recovery and the cyclic steam pilot thus far.
By 19th November Sefton 2010 announced that Ali had already served up an in initial report which was promising and that:
“Dr. Ali continues to evaluate the project and has indicated that he expects to provide additional geologic and engineering data specific to the Tapia reservoir. “
Jolly good. Two weeks later that was yet another placing, raising £861,000. As I detailed in an earlier piece in almost every subsequent RNS Sefton has claimed that Ali’s final report would be posted within a given timeframe or very soon. It has still not been published. Can Sefton provide written statements from Dr Ali showing that he intended to deliver his report in the timeframe indicated in each RNS ( there have been many) or are Sefton’s statements on the publication dates just another lie? Come on Ellerton and Green show us Ali’s emails that back up your claims – I cannot wait.
But back to those wells and the Autumn of 2011. Having ramped the shares to raise £1 million at 2.1p on 8th December 2011 on the back of this drilling news, promise of production and the imminent release of Dr Ali’s report, the company ‘fessed up on 21st December, having drilled 3 of the wells, that: “The last well, Hartje #20, will be drilled once the relevant documentation has been approved by the Los Angeles County Planning office, which is now expected in the New Year.“ You see, when issuing the RNS on 23rd November, Sefton did not actually have the necessary permissions to drill this well at all. It thus did not have a hope in hell of drilling all 4 wells in 5 weeks.
Sefton, on that basis can you explain why the RNS of 23rd November was not a lie? But heck, at least you got yet another placing away on the back of it. In fact there have been 10 “issue of Equity” announcements from Sefton since October 2009. Impressive.
As for the 240 barrels a day? Sheer fantasy. The biggest monthly output number for this 25 year old field in 2012 was for May ( 134 bopd). Looking back over production data going back to 1977 the greatest ever monthly output was February 2009 ( 222 bopd). So where do these guys get their numbers from? It seems like sheer fantasy on their part.
Jim, Michael (I hope you do not mind me calling you by your first names) and Sefton please explain why you have not lied to investors. If you wish to sue me you can contact me on tomat49@gmail.com and serve papers to me at 91-95 Clerkenwell Road, London EC1R 5BX. I am around all day. You have four choices.
1. Sue me. I shall see you in court.
2. Admit that you cannot explain why on a number of occasions you have issued an RNS containing lies, and then go discuss the matter with whoever is appropriate.
3. Deny that your RNS statements contained lies but admit publically that they were misleading and go discuss with whoever is appropriate
4. Do and say nothing in which case your Nomad, Fox Davies, should – if it is to maintain its very high standing – consider its position carefully.
Over to you.
Love and big hugs
Tom Winnifrith
PS. I slept on this piece overnight and wondered about Sefton’s first half production numbers. Surely there was no point in lying about those? Not even Sefton, Jim and Michael would have felt the need to do that. Er….I checked.
Just for the record, according to the State of California first half output was not 21,755 barrels but 21,739 barrels of oil. That works out not at 120 barrels per day but at 119.45 barrels (which would be rounded down to 119 bopd). The differences are not great but none the less, what is stated appears to be a lie. A totally pointless lie but a lie none the less. Gents perhaps you might also explain why that is not the case?
Hopefully these individuals have more important things to do for their shareholders than spend time on a washed out failed tipster/public company Director with nothing better to do than waste their time.Why don’t you just ‘short’ the shares and crow afterwards should you be right.
Lawrence, isn’t it in shareholders interests for RNS statements to give the true facts? And in fact for the integrity of AIM as a whole? Investors have got to be able to trust the contents of RNS releases!
OnTarget
Without doubt but there are ways and means.
Lawrence
I am far from washed up as Sefton is discovering as are a number of companies on both sides of the Atlantic whose statements/accounts I am having a hoot analysing here and on SeekingAlpha in the US.
But go ahead: shoot the messenger.
Sefton has been listed for years and no-one seems to have questioned these statements as it completed placing after placing.
I am up for the challenge
Go stick your head in the sand
Tom
“Go stick your head in the sand”
Thanks for that Tom and you wonder why people see you as a joke these days.
hello Tom,
I really respect some of your blogs, but being a blogger it’s highly necessary to be careful with the number, words and the message put across. There is a bit of misunderstanding in your numbers and calculation. Now you’re taking it personal with some of your followers, ‘coz of SER blogs. I don’t see it as positive for you as blogger, but I’m not old enough to advice. my quote for you and SER is, “A Word Once Spoken Can Never Be Recalled”. Anyhow let’s see how SER, their brokers and mainly their investors react!
Good luck and please chill.
Dan
Its about time someone in a position to do so stood up for the interests of private investors and challenged companies who (allegedly) mislead investors in their RNS releases – WHICH ARE SUPPOSED TO CONTAIN FACTS THAT CAN BE RELIED UPON TO MAKE INVESTMENT DECISIONS – head on.
Aren’t NOMAD’s supposed to ensure RNS releases contain facts? They have a lot to answer for on AIM.
Dan
Will be chilling as I await lunch with my Dad and then… he first home game of the season at U. Park with my daughter. What more could a man ask for this weekend.
OnTarget
Thank you
Tom
hello OnTarget,
The management and their broker’s have to ensure the details of RNS is accurate and not misleading. If anything published by mistake, they have to publish another RNS with correction data. But I’m sure their RNS is appropriate, but there is a bit of misunderstanding by our beloved Tom. The reason why I’m telling is, for the month of May 2012 the production figures are 148bopd and definitely not 134bopd.
Dan
Tom, That’s cool, only the weather is not that great. Wonderful way to have a weekend, with family and U footie. Have a nice day and weekend :)
Dan
Dan,
http://opi.consrv.ca.gov/opi/opi.dll/Search?UsrP_ID=100135202&FormStack=Main%2COperator&Opr__ID=100002209&Action=Get+Sums+&PriorState=Encoded%3DTrue
05/2012 4179 barrels
4179 / 31 days = 134bopd.
Did you forget that May contained 31 days?
Took your advise and sold the lot at a 50% loss.Wish I knew how to short shares!!!
Taking this loss hurts, But Tom is correct. I’d rather lose half than lose everything.
Tom, any ideas how to recover my money? Which share do you recommend buying strongly now?
Washed up? He is far from washed up!
Just too direct, you’ll either love it or hate it I suppose…
Jenny
Sorry if I am a bit direct. I guess there is no point in not coming to the point. Anyway, light relief for all Sefton groupies – my Friday caption contest – a SER special
http://tomwinnifrith.com/articles/597/the-friday-caption-contestwould-sefton-resources-want-to-sponsor-this-one
The usual prize – one of our Piss off Argentina mugs
Best wishes
Tom
Tom,
If you really decide to go to the meeting please do not let Jim Ellerton off the hook. As you know he is a charismatic speaker so I’m guessing he will keep lying and lying about the figures to appease you and some shareholders… please do not accept this! I also feel it is time to stand up to these types of CEOs of these companies trading on AIM, giving false statements, duping unsuspecting investors (like me) however I have no courage and I am not a big enough fish to do this!
I am no longer a holder because of you and you have probably saved me a lot of money long term, but will not be attending the meeting (as it is time to bury this disaster and move on). Nonetheless, I truly hope you can make a memorable statement not just against JE but also against fraudulent CEOs operating companies globally. Good luck.
OnTarget,
You’re a star mate, but you forgot stars do blink. lol, juz kidding.
coming to the point, only 23 wells produced 4179 bbl of oil for 645 days summation in May’12. And few wells didn’t produce for complete 31 days, so ideally the calculation of bopd should be summation of the individual well average (i.e., summation of bopd for individual wells). I ended up with 148bopd from the same website data, so the numbers doesn’t change for eyes, but obviously it will change when you do the right calculation :) For my understanding this is how bopd is calculated, please correct me if I’m wrong :) Every day is a learning curve.
Dan
Dan,
You can’t just miss out days because they didn’t produce anything on those days, that is even more misleading!
OnTarget, As far as I know this is how bopd is calculated and that is the reason the days were specified in that DOGGR site too. I leave it to you to understand, misleading or misunderstanding ;)off topic example for misleading or misunderstanding: Thumbs up in UK is not the same in Middle East, b’coz of that we could not blame neither country! ;)
Dan
All investors in oil stocks know what bopd means – barrels of oil per day – an average of the daily production rate. It certainly doesn’t mean an average of the daily production rate (apart from certain days where we didn’t produce anything at all that we’re not going to tell you about). That is nonsense.
OnTarget,
my friend,that is not nonsense. The answer is in your reply itself :) If you say “bopd-barrels of oil per day – an average of the daily production rate”. my question is, what is the monthly oil production? and my understanding is, the monthly oil production is the summation of “average of the daily production rate” for that month. please advise ;)
Dan
I had starting investing in this company for last few months and have been researching about this company and I was also wondering that Dr. Ali is to submit the report since 2010 but now after reading your blog my doubts are clear, have off loaded all my holdings in the co. except far very tiny bit i.e. £60/point.
After all there are hundreds of good companies in UK, why invest in the one for which you are doubtful ?
Pankaj,
What a great investor you’re, juz on reading a blog you off loaded cool.
Super investor! keep it up.
Dan
“After all there are hundreds of good companies in UK, why invest in the one for which you are doubtful ?”
So why did you in the first place Pankaj?
Jenny
For the avoidance of doubt I have registered to attend the meeting and plan to go. The more and more I look (see today’s piece) the more questions I have for Jim Ellerton.
It may be that Sefton do not allow me in. Or do not take my questions. If so I shall print them out on cards and those who join me at Real Man Pizza for a half price pizza beforehand will each be given a question.
Best wishes
Tom
I am trying to reply Dan but for some reason I can’t see what I have posted and it says that I am trying to post duplicate text, anyway…
Bob,
I research a company and then invest, BUT even I have invested I keep trying find information about the company.
I hope that answers your question.
Actually your question makes me laugh.
There could be a possibility that you might not have found out all the things at the time of investing but that doesn’t mean you stick to it emotionally.
Regards
Pankaj
Dan,
Did you fully read what I wrote ? if yes then understood ?
A part of what I wrote said “……and have been researching about this company and I was also wondering that Dr. Ali is to submit the report since 2010 but now after reading your blog my doubts are clear….”
So it means I had some doubt which Tom’s blog cleared.
I also mentioned “….there are hundreds of good companies in UK, why invest in the one for which you are doubtful ?”
So does this means that I offloaded my Sefton holdings just on reading Tom’s blog ?
A bit more about reasoning behind, I think Sefton is progressing towards growth but at the moment I don’t think it is worth holding, maybe towards December it might be, and in between if it falls I might buy, also on the positive side is Kansas,
I won’t regret a bit if Sefton soars to 3p or even 5p, I have investments in more than 25 companies and Sefton was just one of it and still it will continue to be on my watch list, I just think there are better companies to hold at the moment. Dan I geneuinly wish you good with Sefton.
Regards
Pankaj
Dan,
Did you fully read what I wrote ? if yes then understood ?
A part of what I wrote said “……and have been researching about this company and I was also wondering that Dr. Ali is to submit the report since 2010 but now after reading your blog my doubts are clear….”
So it means I had some doubt which Tom’s blog cleared.
I also mentioned “….there are hundreds of good companies in UK, why invest in the one for which you are doubtful ?”
So does this means that I offloaded my Sefton holdings just on reading Tom’s blog ? …continued
…. Dan,
A bit more about reasoning behind, I think Sefton is progressing towards growth but at the moment I don’t think it is worth holding, maybe towards December it might be, and in between if it falls I might buy, also on the positive side is Kansas,
I won’t regret a bit if Sefton soars to 3p or even 5p, I have investments in more than 25 companies and Sefton was just one of it and still it will continue to be on my watch list, I just think there are better companies to hold at the moment. Dan I geneuinly wish you good with Sefton.
Regards
Pankaj
Been.shorting.this.since.last.year.laughing.at.the.muppets.and.still.causing.chaos.under.different.guises.on.the.iii.board….SER.is.a.train.wreck.waiting.to.happen.