12th Nov 2007 12:12
Sterling Energy PLC12 November 2007 12 NOVEMBER 2007 STERLING ENERGY PLC ("Sterling" or the "Company") SIGNS PRODUCTION SHARING CONTRACT IN KURDISTAN Sterling (symbol: SEY), an AIM listed independent oil & gas exploration andproduction company with interests in the Gulf of Mexico and Africa / MiddleEast, today announces that it has entered into a Production Sharing Contract ("PSC") with the Kurdistan Regional Government of Iraq ("KRG") for the SangawNorth exploration block ("Block"). HIGHLIGHTS • Industry estimates suggest potential for up to 45 billion barrelsof oil and 100 tcf of gas in Kurdistan • Sangaw North is a highly prospective block in a proven but largelyunexplored area. • Result of long relationship with KRG - Erbil office opened early2007 and Country Manager in place • Award represents strategic entry for Sterling into the Middle East • Potential to fast track seismic and exploratory drilling addinghigh impact prospectivity to Sterling's existing exploration portfolio. THE PSC The Block, which covers an area of 492 sq km is located approximately 140 kmsouth east of Erbil and 50 km south west of Suleimaniah. It lies in a highlyprospective area around 50km south east of the giant Kirkuk oil field and ontrend with the major Taq Taq and Chemchemal oil and gas discoveries. The Blockitself contains a large surface anticline with the possibility of multiplereservoir targets, in common with many existing fields in the area, providingstrong encouragement for exploration success. The terms of the PSC are in accordance with the terms and conditions publishedby the KRG. Sterling has 100% interest in the PSC subject to back in rights forthe KRG and local industry partners. The PSC has an initial 3 year exploration period during which Sterling plans toacquire some 200km of 2D seismic and drill at least one exploration well. TheCompany will start work immediately, having already established an office inErbil in early 2007. It is anticipated that expenditure over this period,including initial costs, could be in the order of $35 million. Sterling's signature of the PSC, together with other recently signed agreementswith the KRG, brings the number of international oil companies now working inKurdistan to 25. Commenting today, Harry Wilson, Chief Executive of Sterling Energy Plc, said: "We have worked closely with the KRG and are now delighted to have signed thisPSC. Kurdistan is a vastly under explored area with huge potential and theprospective Sangaw North Block adds significant high impact exploration to ourportfolio. We opened an office in Erbil earlier this year and are now ready tocommence exploration operations there. The passage of the Kurdistan Region Oil &Gas Law and the Model PSC have provided an excellent framework for oil and gasinvestment in Kurdistan and we aim to further develop our activities inKurdistan and the wider Middle East region. Enquiries Sterling Energy Plc (020 7405 4133) Web site: www.sterlingenergyplc.comHarry WilsonGraeme Thomson Evolution Securities (020 7071 4300)Rob CollinsTim Redfern Citigate Dewe Rogerson (020 7638 9571)Media enquiries: Martin JacksonAnalyst enquiries: Kate Delahunty This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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