SEY.L Regulatory News (SEY)

23 November 2010

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 on operations in the Sterling operated Sangaw North block (53.33% working interest) in Kurdistan.

The Sangaw North-1 exploration well has been drilled to a depth of 3,396 metres, approaching the depth at which the Company plans to run casing prior to drilling into the Jurassic reservoir targets. While drilling at this depth, the well encountered a zone of high formation pressure with the result that hydrocarbon gas, containing approximately 0.5% hydrogen sulphide, entered into the well and pressure was observed at the surface.

While conducting operations to remove the gas from the well and eliminate the surface pressure, the drill pipe parted at a depth of approximately 850 metres.

The Company plans to circulate-out any further influx of gas from the well bore, eliminate the surface pressure, and retrieve the drill pipe and bottom hole drilling assembly from the well. These operations are challenging and may require additional equipment to be mobilised to the well site; the Company is unable to provide an estimate of the length of time that will be required to successfully complete them. Once they have been completed, the Company plans to run casing in the well. Sterling will make a further announcement at the appropriate time.

The entry of hydrocarbon gas into the well, whilst encouraging, does not provide information as to the potential for material hydrocarbon accumulations in the Jurassic reservoir target. Wire line logs and flow tests will be required to evaluate any potential reservoirs encountered and these have not yet been acquired.

Alastair Beardsall, Sterling's Chairman said:

"Sterling is focused on successfully completing the current operations in a safe and reliable manner. Once this is done, well operations will continue to evaluate the potential of the Jurassic reservoir targets."

Andrew Grosse, B.Sc. (Hons) Geology & Geophysics (1980), Exploration & Technical Director of Sterling Energy Plc, who has been involved in the oil industry for over 29 years, is the qualified person that has reviewed the technical information contained in this press release.