19th Jul 2005 07:00
Sterling Energy PLC19 July 2005 19 July 2005 Sterling Energy plc ("Sterling" or the "Company") Madagascar farm-out to ExxonMobil Sterling, the AIM listed (symbol: SEY) independent oil & gas exploration andproduction company, announced today that it has signed a farm-out deal withExxonMobil for the Ambilobe and Ampasindava offshore licences in Madagascar. Sterling was granted a 100% interest and operatorship of the two licences whichwere signed in July 2004 and formally ratified in November 2004. The licencescover approximately 20,800 sq km and 13,147 sq km, respectively of the Ambilobeand the Majunga Basins. The total exploration licence term in each licence is 8years and in the event of a commercial discovery a 25 year production licencewill be granted. Under the terms of the deal with Sterling, ExxonMobil will pay for a significantexploration work programme in return for a 70% interest in the licences. Theagreement is subject to certain milestones being achieved with the initialExxonMobil commitment for the first two exploration phases under the licencecovering technical studies and 2D seismic. Assuming a positive outcome of thisinitial work, which could take up to a further 3 years, ExxonMobil will thenfinance 3D seismic and up to two wells per licence. The transaction remainssubject to approval of the Government of Madagascar. The Ambilobe and Ampasindava licences cover a large under-explored area offshoreMadagascar in which all of the geological elements for a working petroleumsystem are believed to be present. Madagascar has seen an increase inexploration activity - in 2004 ExxonMobil and Norsk Hydro farmed-in to Vanco'sexploration licence in the Majunga basin, adjacent to Sterling's Ampasindavalicence. Sterling Chief Executive, Harry Wilson, said: "The signing of this deal with a partner such as ExxonMobil, with theirextensive existing interests in Madagascar, reflects the potential of thisacreage. Sterling will benefit from its residual 30% carried interest in thelicences without the financial risks of an exploration work programme." For further information contact: Sterling Energy plc (01582 462 121) Web site: www.sterlingenergyplc.comHarry WilsonGraeme Thomson Citigate Dewe Rogerson (0207 638 9571)Martin JacksonRachel Lankester 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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