SEY.L Regulatory News (SEY)

2 Jun 2005 13:38

Sterling Energy PLC02 June 2005 2 JUNE 2005 STERLING ENERGY PLC CHINGUETTI DRILLING UPDATE Sterling Energy, the AIM listed (symbol: SEY) independent oil & gas explorationand production company, note that the following announcement was made earliertoday by Hardman Resources Ltd: Hardman Resources Ltd ("Hardman") announces that the drilling rig "Stena Tay"has completed the drilling of the wells required for the first phase of theChinguetti development project, offshore Mauritania. This drilling programincluded 5 new oil producers, 5 water injectors to maintain reservoir pressure,and 1 gas injection well drilled on the Banda discovery for disposal of theChinguetti associated gas. The Chinguetti early development well drilled in late2003 will also be tied into the production system, resulting in the planned 6producing wells being on stream at the end of the first phase of development.During the drilling of the Banda gas injection well a number of cores were cutand fluid samples taken, to aid in the continuing evaluation of this discovery.The "West Navigator" drilling rig remains in the Chinguetti field and iscontinuing work on the installation of well completion equipment. As of 31 May2005 sand completion equipment had been installed on 7 of the 10 new wells, andthis work will be followed by the installation of the production tubing andsubsea trees before connecting the wells to the Berge Helene Floating ProductionStorage and Offtake (FPSO) Vessel for production. Drilling results on Chinguetti were positive, meeting or exceeding expectations.The completion of the drilling phase removes one significant element of forwardproject risk and confirms that the volume of oil-in-place is at least asexpected. On the assumption that early well performance remains in line withforecasts, Hardman anticipates that this will result in an increase in provenreserves when it carries out its initial reserves redetermination. The projectis now over 71% complete and the target date for first oil from the Chinguettifield remains Quarter 1, 2006. The "Stena Tay" is preparing to move to the Canary Islands for upgrade worksbefore returning in July to commence the 2005/6 exploration and appraisalprogram. The forward drilling schedule and selection of the exploration andappraisal targets are the subject of a number of key joint venture meetings tobe held from mid-June. SCOTT SPENCER, DIRECTOR Note: In accordance with Australian Stock Exchange Limited listing requirements,the geological information supplied in this report has been based on informationprovided by geologists who have had in excess of five years experience in theirfield of activity. Harry Wilson, Chief Executive of Sterling Energy Plc, said: "We are extremely pleased that the Chinguetti drilling results met ourexpectations, thereby confirming our belief in the project. The next 12 monthswill be very exciting for Sterling as we remain on track for first oil fromChinguetti in first quarter 2006." Enquiries Sterling Energy (01582 462 121) Web site: www.sterlingenergyplc.com Harry WilsonGraeme Thomson Citigate Dewe Rogerson (020 7638 9571) Nina Soon Evolution Securities (020 7071 4300) Rob Collins / Henry Turcan This information is provided by RNS The company news service from the London Stock Exchange