Sefton Resources posts drop in annual profit

Sefton Resources reported a 3.4 per cent drop in annual profit as the oil and gas company incurred higher costs.

Gross profit for the year to December 31st, after deducting the costs of sales from revenue, came to $2.8m compared to $2.9m the previous year.

Cost of sales rose to $1.5m from $1.2m, reflecting higher repairs and maintenance expenses and an increase in royalties payable from improved revenues.

Revenues climbed 3.6% to $4.3m, driven by a marginal rise in realised oil prices at an average of $103 per barrel.

Oil volume sold in California jumped to 42,498 barrels from 40,176 barrels due to the timing difference between production and sale of oil.

Earnings before non-cash charges, interest and taxes were $0.96m in 2012, down from $1.1m a year earlier.

During the year the company invested $5.2m cash invested in asset development, compared to $3.5m in 2011.

An additional licence was acquired in Kansas where a number of oil wells were drilled. The group is investing in a workover and recompletion programme that will see oil and gas wells brought back into production.

"Sefton has remained profitable while continuing to fund development and expansion of its assets and operations," Chairman, Jim Ellerton, said.

"From here, the company expects to add outside capital to continue this momentum."

Shares rose 5.56% to 0.48p at 09:14 Monday.

RD