7 May 2010 07:00
Sterling Energy Plc
7 May 2010
INTERIM MANAGEMENT STATEMENT
Sterling Energy Plc ("Sterling" or the "Company") is today issuing its Interim Management Statement for the period beginning 1 January 2010.
HIGHLIGHTS
·; Sangaw North #1 exploration well is drilling ahead at 1,095m.
·; Production, net to Sterling from the Chinguetti field, averaged 714 bopd for the first quarter.
·; Adjusted EBITDA in first quarter of $ 2.1 million (unaudited).
·; Loss after tax in first quarter of $1.3 million (unaudited).
·; Cash as at 30 April 2010 of $109.3 million (unaudited)
·; Exploration programme funded from partners carry, existing cash and cash flow.
Alastair Beardsall, Sterling's Chairman, said:
"We are pleased with the drilling progress at Sangaw North since we last reported on 29 March 2010; Sterling's project team, located in Kurdistan and London, continue to work hard to achieve our objectives of testing the prospectivity of the Cretaceous and Jurassic reservoirs within the Sangaw North prospect."
Kurdistan
The Sangaw North #1 exploration well is drilling ahead at 1,095m. Drilling operations remain challenging, however good progress is being made towards the top of the Cretaceous reservoirs, expected at 1,699m, which may contain best estimate gross resource of 804 mmbbl of oil (source: RISC (UK) Ltd). Below the Cretaceous lie additional prospective reservoirs in the Jurassic which are also planned to be evaluated by the Sangaw North #1 well. The well is expected to reach its target depth in the third quarter 2010.
Cameroon
The Ntem Block, offshore Cameroon, remains in force majeure. Progress continues towards a resolution of the border dispute between the governments of Cameroon and Equatorial Guinea, but no specific timetable can be forecast. The Company currently holds 100% of the Ntem licence and expects to farmout a portion of its interest in exchange for being carried for its share of drilling costs.
Madagascar
The government of Mr Rajoelina, formed after the coup in March 2009, has not been recognised by its African neighbours or by many of the world governments. Sterling, and ExxonMobil, our partner and the operator of the Ampasindava Block, will look for an improvement in the political situation before commencing any significant expenditure.
Gabon
The joint-venture partners in the Iris Marin PSC have agreed to allow the PSC to lapse when it expires on 11 May 2010. Furthermore the joint-venture partners in the Ibekelia project (technical evaluation agreement) have agreed to cease negotiations for a PSC for the Ibekelia Block. Following these two decisions, Sterling will no longer have any projects in Gabon.
Mauritania
Production from the Chinguetti field for the first quarter 2010, net to Sterling, totalled some 64,244 bbl, an average of 714 bopd. There are no approved plans for any further development of the Chinguetti field and the field may be abandoned earlier than previously expected.
Financial Position
In the first quarter of this financial year, Sterling reports the following unaudited results:
|
| Q1-2010 (Unaudited) | FY 2009 (3) | |
|
|
| $ '000 | $ '000 |
| Revenue from oil sales |
| 4,759 | 22,709 |
| Adjusted EBITDA | (1) | 2,097 | 10,510 |
| Loss after tax | 1,331 | 31,634 | |
| Cash and cash equivalents at period end | (2) | 110,570 | 113,859 |
(1) EBITDA is earnings before interest (and other finance income and costs), tax, depreciation, depletion, amortisation and write-offs of oil & gas assets. Adjusted EBITDA is calculated before share based payments, charged to the income statement under IFRS 2.
(2) Cash balances at the end of Q1 2010 totalled $110.6m, including $6.9m of partner funds, (year end 2009: $113.9m, including $6.9m partner funds). During the period the Company received its final payment from escrow relating to the sale of its USA operations. The Group continues to remain debt free.
(3) FY 2009 figures are for the continuing operations only and excludes, in particular, the results for the USA business that was sold in December 2009
For further information contact:
Sterling Energy Plc +44 (0)20 7405 4133
Alastair Beardsall, Executive Chairman
Jonathan Cooper, Finance Director
www.sterlingenergyplc.com
Evolution Securities +44 (0)20 7071 4300
Rob Collins / Chris Sim