9 Feb 2015 12:20
9 February 2015
Mauritania - Royalty Agreements with Premier Oil plc
Sterling Energy Plc, the AIM listed oil and gas exploration company (AIM: SEY), announces that it has recently been notified of changes to Premier Oil Plc's ("Premier") interests in PSC A, PSC B and PSC C-10 offshore Mauritania. Sterling has an interest in these licences under two Royalty Agreements ("Royalty Agreements") with Premier that cover, amongst other things, a royalty over Premier's share of production from the Chinguetti field and the commercial development of existing or future discoveries within the PSC A, PSC B and PSC C-10 contract.
Background
The Royalty Agreements initially covered PSC A and PSC B, including production from the Chinguetti field.
In 2011, the exploration areas of PSC A and PSC B were transferred to PSC C-10 and the remaining prospects on PSC A (namely the Banda gas discovery) and PSC B (namely the Tiof and Tevet discoveries) were ring fenced under their existing PSC terms.
Notwithstanding the grant of PSC C-10, the Royalty Agreements continue to grant Sterling a royalty over Premier's interest in:
(i) production from the Chinguetti field;
(ii) the commercial development of the Banda, Tiof and Tevet discoveries (if any); and
(iii) the commercial development of any future discoveries on PSC C-10 (if any).
Premier's exit from PSC A, PSC B (other than Chinguetti) and PSC C-10
Sterling has recently been notified by Premier that Premier's interest in:
(i) PSC B as it applied to the Tiof discovery has expired effective 30 November 2012;
(ii) PSC B as it applied to the Tevet discovery has expired effective 31 May 2013;
(iii) PSC A as it applied to the Banda gas discovery has expired as at 31st December 2014;
(iv) PSC C-10 has expired as at 30th November 2014.
Premier's exit from PSC C-10 does not affect the entry into Phase 2 of PSC C-10 by Tullow Oil Plc and Société Mauritanienne des Hydrocarbures et du Patrimoine Minier.
Premier's exit from each of PSC A, PSC B and PSC C-10, as set out above, does not affect the royalty currently received by Sterling from Premier over Premier's interest in production from the Chinguetti field. Other than Chinguetti, Sterling does not expect the Royalty Agreements to apply to any other discoveries or developments related to PSC A, PSC B or PSC C-10.
Sterling's Chairman, Alastair Beardsall said
"It is disappointing that Sterling will not benefit from a royalty linked to Premier's participation in a development of Banda, Tiof and/or Tevet."
Further Information
Further information can be found on Sterling Energy's website at www.sterlingenergyplc.com or:
Sterling Energy Plc (+44 20 7405 4133)
Alastair Beardsall (Chairman)
Peel Hunt LLP (+44 20 7418 8900)
Andy CrossleyRichard Crichton