Current Activities

Operations Update: January 14, 2008

Sefton Resources Inc, the AIM listed oil and gas production company with assets in California and Kansas announces that significant progress was achieved during the final quarter of the year despite the fires that caused havoc in California.

TEG Oil and Gas USA, Inc. ("TEG USA")

Production from Sefton's wholly owned subsidiary TEG USA averaged 193 BOPD during the month of December, 2007, thus finishing the year with a strong production increase at the Tapia Field in California. This increase was due to the excellent results from the two-well drilling programme completed in late November. The two wells, Hartje#16 and Hartje#17 had combined 30 day average initial production rates of 78 BOPD. This increase in oil production, combined with record oil prices, has resulted in a significant improvement in cash flow.

TEG USA plans to follow up these drillings with a three-to-four well drilling programme beginning in February. These planned wells will be similar in scope to the previous wells. TEG USA entered into a drilling contract with Kenai Drilling on January 8, 2008 to perform this work.

As previously announced, TEG USA is moving forward with its steam pilot testing of the Yule #7 and Yule #10 wells, also at the Tapia Field, using propane gas as fuel. The change in source fuel was made after mechanical issues were identified in one of TEG USA's gas source wells. Despite having other gas wells available for use, TEG USA believes the decision to use propane is sound because it can test the viability of steam stimulation without excess well repair expenditures and utilize available monies on the drilling of new oil wells; it can also expedite the programme without constructing a gas supply line from the neighbouring lease where other gas wells are located.

Constructing gas supply lines and determining what wells will provide gas for a steam programme can be designed once the steam pilot results have been evaluated.

At TEG USA's Eureka Canyon oil field the reconnaissance survey was completed and an infill exploratory geochemical survey is planned during 2008.

TEG MidContinent, Inc. ("TEG MidContinent")

TEG MidContinent moved cautiously during 2007, responding to the varied results achieved by industry operators in the Forest City Basin in Kansas. It has selectively focused on prime acreage in its lease acquisition programme and undertaken geological and engineering studies.

During the year TEG MidContinent acquired an additional 5,000 acres and now its Anderson and Franklin County project is comprised of approximately 36,000 acres. The additional acreage has close proximity to pipelines and is supported by
extensive geology, including detailed coal maps. The acreage is situated such that TEG MidContinent has coverage on both conventional oil and gas possibilities and on the thicker, potentially more productive, Bevier and Riverton coal deposits. In addition TEG MidContinent's acreage position in Leavenworth County is now 7,000 acres, which also provides excellent potential for both conventional and unconventional gas plays.

TEG MidContinent has contracted for design of a "pilot drilling programme" that is expected be implemented during 2008. Discussions continue with a number of potential joint venture partners which would allow TEG MidContinent to expand the planned drilling programme.

Other Matters

Sefton also announces that a former director, Karl Arleth, has elected to convert a loan note of $39,310 into 330,827 shares of the Company at an exercise price of £0.06 per share. These shares will be admitted to trading on AIM on 17 January, 2008.

Chairman, Jeremy Delmar-Morgan, commented: 'We finished the year in good form, despite the late arrival of the drill rig and the Californian fires which meant that it was not until December that we could see the rewards from the start of our drilling programme. The pilot steaming programme continues with the use of propane gas. We decided to follow this route so that we can quickly attain the data we need to determine the most effective way of increasing production from existing and future wells. In addition this should improve reserves, as well as cash flow. With the $10m line of credit available for our development programmes, we start 2008 in an excellent position to exploit all the ground work that has been put in place during the last two years.