SEY.L Regulatory News (SEY)

27 January 2011

STERLING ENERGY PLC

("Sterling" or the "Company")

Kurdistan Well Operations Update

Sterling (AIM: SEY), the independent oil and gas exploration and production company with interests in the Middle East and Africa, provides the following update for the Sterling operated Sangaw North block in Kurdistan (53.33% working interest).

Since the update on 6 January 2011, a further 280 metres of drill pipe have been recovered from the Sangaw North No.1 well and, with the top of the remaining drill pipe now at approximately 1,950 metres, further progress in recovering drill pipe has not been possible.

The well will now be side-tracked and re-drilled to approximately 3,300 metres, the depth just above where the previous influx of gas was recorded. At this depth, casing will be run and cemented prior to drilling deeper into the potential reservoir section that is believed to contain hydrocarbons.

The Company estimates that re-drilling the remaining section to the planned casing point will take approximately 45 days.

Angus MacAskill, Sterling's Chief Executive said:

"We are pleased to have recovered drill-pipe to almost 2,000 metres; this allows us to side-track in the open hole below the existing casing shoe and drill a new wellbore to the planned casing point with the same 8.5 inch hole size as the original wellbore. This configuration will permit the well to reach its original target depth and test the potential of the Jurassic formations."

Angus MacAskill, M.Eng. Petroleum Engineering (1987), Chief Executive of Sterling Energy Plc, who has been involved in the oil industry for 29 years, is the qualified person that has reviewed the technical information contained in this press release.