Sefton Resources reveals it is unable to repay loan

Shares in Sefton Resources sank on Tuesday after revealing it was not in a position to repay a bank loan that had been due at the beginning of December.

The company explained that it was informed by partner Hawker Energy that it had not completed its financing to acquire an interest in their joint venture company, Tapia, which meant that it was unable to make the repayment.

Sefton also said the recent decline in crude oil prices, particularly in markets for heavy crude, had hampered lenders and investors in making new commitments.

Production at Tapia has been fluctuating in the 100 to 80 barrels per day range, with no steam flood in operation and the new high pressure pump sidelined until it is fully paid for.

"The bank has provided a short period of time for Hawker to table a revised plan to complete the financing," the group said.

"The bank has not indicated a deadline for their response to a new proposal, however, we expect the time line to be short."

Sefton shares had fallen 19.74% to 15.65p by 12:32.