15th Jun 2006 11:52
Sterling Energy PLC15 June 2006 15 JUNE 2006 STERLING ENERGY PLC ("Sterling" or the "Company") 2006 ANNUAL GENERAL MEETING "MAJOR PROGRESS IN 2006" At today's Annual General Meeting, Mr. Richard O'Toole, Chairman of Sterling,made the following statement: "2005 was another successful year for Sterling. Financial and operatingperformance improved. Turnover was up by 19% at £13.6 million. Pre-tax profitsrose 20% to a record £5.0 million and cash inflow (before one-off closure costsand working capital movements) increased 13% to £8.8 million. We invested afurther $65 million in the Chinguetti development and expect to have invested afurther $50 million during this year, a substantial investment for Sterling. With Sterling's first oil sales from the Chinguetti Field in April 2006, therehas been a marked increase in cash flow. Our first two cargoes realised a totalof over $21 million, before operating costs and taxation. A third cargo hasrecently been lifted. In addition, we have the cash flow from our royaltyinterest and from the USA. The commencement of the Chinguetti Field development on-time, has been asignificant success for all the parties involved. It has been pleasing to seethe recent amicable resolution to the issues raised by the MauritanianGovernment in relation to PSC's A and B. The technical and operational issuesthat have arisen on the Field since first oil are being addressed by theoperator. Based on current information, we remain confident that the projectwill meet our projected financial returns. The outcome also bodes well forother expected development decisions in 2006 on the Tevet and Tiof discoveries,as well as for our carried interest in the exploration programme, which isexpected to recommence shortly. Our drilling activity in the Gulf of Mexico has resulted in an increase inproduction from an average of 7.8 mmcfged in the first quarter to its recentlevels of 9.5-10.0 mmcfged. Sterling has committed to a further four explorationwells in the second half, including 3 onshore. These could materially impact onproduction and reserves. We were delighted to become the first British company to sign an MOU with theKurdistan Regional Government of Iraq. Field studies continue, a local officeis being opened and a country manager will be appointed. Recent developmentsgive cause for increasing optimism. In addition to the US and Mauritanian activity, a largely carried explorationprogramme of up to 3 wells in Africa is expected over the next year, togetherwith interpretation of the 4,000 km of recently acquired 2-D seismic, offshoreMadagascar. New projects are being actively sought. With oil prices remaining around $65/bbl and with the increased cash flow fromour investment programme, a key objective is an expansion of the upsidepotential of the asset base. New licences, exploration, development andproduction activity will target higher impact opportunities. Whilst we will notoverpay for deals or opportunities, your Board continues to assess the many newopportunities for growth. There has been major progress so far in 2006 and your Board remains confidentthat this will be a year of further development for Sterling." All resolutions proposed at the AGM were duly passed and Dr E Butler has, aspreviously announced, today stepped down as a director. Enquiries Sterling Energy (01582 462 121) Web site: www.sterlingenergyplc.comHarry WilsonGraeme Thomson Citigate Dewe Rogerson (020 7638 9571)Media enquiries: Martin JacksonAnalyst enquiries: Nina Soon Evolution Securities (020 7071 4300)Rob CollinsHenry Turcan This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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