Odewayne, Republic of Somaliland

05 August 2016

Odewayne, Republic of Somaliland

Sterling Energy plc (the "Company"), the AIM listed oil and gas exploration company (AIM: SEY), is pleased to announce that the Government of the Republic of Somaliland has granted a further 2 year extension to the current period of the Odewayne Production Sharing Agreement ("PSA").

The expiry dates of the relevant exploration periods under the PSA shall now be:

· Third Period: 2 November 2018;

· Fourth Period (optional): 2 May 2020;

· Fifth Period (optional): 2 May 2021; and

· Sixth Period (optional): 2 May 2022.

The minimum work obligations for the exploration periods remain unchanged: (i) the acquisition of 500km of 2D seismic during the Third Period; and (ii) the acquisition of 1,000km of 2D seismic and one exploration well during the Fourth Period.

Sterling holds a 40% interest in the PSA and will be carried by Genel (50% interest and Operator) for the costs of all exploration activities during the Third and Fourth Periods of the PSA.

Eskil Jersing, the Company's Chief Executive Officer said:

"We would like to thank the Government of the Republic of Somaliland and Genel for agreeing to the further 2 year extension. We look forward to the commencement of the seismic campaign."

Further Information

This announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

Further information can be found on the Company's website at www.sterlingenergyplc.com