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Future Plans
• Sales process for the USA business commenced in April 2008 after a comprehensive strategic review of the Company's assets and prospects. The Board expects that the proceeds of any sale will enable it to repay all of the Company's borrowings and leave it with significant net cash
• The US sale, together with cash revenues from its Mauritanian producing interests, will provide funding to increase the Company’s investment in the considerable upside potential of its existing key assets in Africa and the Middle East, as well as to develop new opportunities
• Sterling will focus on an increasing number of higher impact exploration prospects
• Independent consultants, RISC, in a review in April 2008 of two prospects in Kurdistan and Madagascar, indicated unrisked best estimate net prospective resources of over 500 million bbls of oil with a high net estimate of over 1,900 million barrels of oil for Sterling’s current interests
• Conduct a 2D seismic programme in Kurdistan ahead of drilling in 2009
• Conduct well site survey in Madagascar and secure rig for high impact near-term drilling
• The Chinguetti development programme in Mauritania has recently commenced, comprising three workover wells and two development wells with an initial target of doubling production. An appraisal well on the Banda gas discovery encountered gas and oil columns with contacts similar to those seen in the discovery well
• Exploration well on the Charlie prospect, mean case 21 million bbls and upside case 40 million bbl, offshore Gabon is planned for May. A well in Themis Marin drilled in January 2008 was plugged and the licence has expired
• Strategy includes farmouts to enhance risk-reward ratios and enable development of a wider portfolio of opportunities
• First quarter 2008 production averaged 5,824 boepd (year 2007, average 5,760 boepd)
• Cash and undrawn facilities of $16.4 million at end Q1 2008
• Sterling has signed letters of intent to sell peripheral USA properties for US$8.7 million and has completed six USA farmouts in 2008
NEW STRATEGY
Sterling is a UK AIM listed exploration and production Company, which is redefining its strategy in order to focus its resources on higher impact opportunities in Africa and the Middle East.
The Board of Sterling has recently undertaken a comprehensive strategic review of the Company's assets and prospects and has concluded that it would be in shareholders’ best interests to sell the USA business. The Board believes that the USA business has grown to a size that makes it attractive to prospective buyers. On 7 April 2008 the Board announced that it had therefore mandated BMO Capital Markets to manage the sales process.
The Board expects that the proceeds of any sale will enable it to repay the Company's borrowings and leave it with significant net cash. This, together with cash revenues from its Mauritanian producing interests and farmouts, will provide funding to increase the Company’s investment in the considerable upside potential of its key assets in Africa and the Middle East.
Sterling will focus on an increasing number of higher impact exploration prospects, which currently include Madagascar, Kurdistan, Gabon, AGC (a joint exploration zone between Senegal and Guinea Bissau) and Cameroon. It will also pursue new opportunities, including potential acquisitions.
Studies by an independent consultancy, RISC, covering two of the Company’s prospects in Kurdistan and offshore Madagascar, were recently completed. These indicated unrisked best estimate net prospective resources, which are dependent on exploration success and other factors, of over 500 million barrels of oil with a high net estimate of over 1,900 million barrels of oil for Sterling’s current interests on those two prospects.