Sterling Energy, the AIM listed independent oil & gas exploration and production company operating in the Gulf of Mexico and Africa, has announced its 2006 Interim Results.
Highlights
• First half 2006 turnover up 263% at £24.5 million (H1 2005, £6.7 million: year 2005, £13.6 million)
• Net profit up 159% at record £4.9 million in first half 2006 (H1 2005, £1.9 million; year 2005, £2.1 million)
• Record earnings per share of 0.34p (H1 2005, 0.13p, year 2005, 0.15p)
• Record cash inflow from operations of £15.8 million H1 2006 compared with outflow of £11.8 million in first half 2005 (year 2005 outflow of £7.4 million)
• Record H1 2006 production of 4,671 boepd, up 175% on H1 2005
• Average Group realised sales prices, after hedging costs, of $51.86/boe (first half 2005 $40.78/boe)
• Unrestricted cash of £15.5 million at end of June 2006 (end 2005: £7.6 million) and undrawn bank facility of £4.9 million. Increased since by approximately £7 million
• First oil produced from Chinguetti field on time in late February 2006: operational uncertainties about field productivity and future development plans reduce internal 2P ultimate field reserve estimate by 43% to 80 million bbls
• Internally estimated Sterling Group 2P reserves of 16.6 million boe at end June 2006 (December 2005: 21.3 million boe)
• Drilling underway: 5 wells expected over the second half, 4 in US with potential to double reserves there
• Carried second half exploration well in Mauritania
• Tiof and Tevet development proposals awaited: Sterling royalty interest has no development cost and cost benefits could accrue to Chinguetti
• 2D survey in Madagascar being processed: Exxon to become operator of Ampasindava block, contiguous to its other offshore licences where an exploration well is expected in late 2007
• Planning for mid-2007 well offshore Gabon on track (20.57% interest, 18% carried) with internally estimated upside of net 10 million bbl
• Two wells offshore Guinea-Bissau on track for mid 2007: internally estimated upside of up to 15 million bbls net (5% option to back-in after the first well)
• Progress continues on Kurdistan PSC and local office being set-up
Harry Wilson, Chief Executive of Sterling Energy Plc, said:
“Our position continues to strengthen with a now sizeable and growing cash position and an active and largely carried exploration portfolio. We have seen excellent progress on some potential high impact projects. Over the next year we have 8 wells planned, any one of which could be significant. Alongside this activity, we continue to seek new drilling opportunities and production acquisitions that can bring significant upside potential to the Group.”
