Sterling Energy Slips on Kurdistan Update

Shares in Sterling Energy (AIM: SEY), the independent oil and gas exploration and production company, fell 10% on Thursday morning following an update on operations at its Sangaw North block (53.33% working interest) in Kurdistan.

Since the last update on 23 November 2010, operations have been conducted to remove the hydrocarbon gas, containing approximately 0.5% hydrogen sulphide, that had entered the well bore and to retrieve the drill pipe that had parted at a depth of approximately 850 metres.

The gas influx has been contained, removed from the wellbore, and flared. The drilling fluid in the well bore has been replaced with heavier fluid to control the higher formation pressure encountered at the base of the well.

The drill pipe in the well bore has been adversely affected by the hydrogen sulphide within the gas, with the steel becoming brittle and prone to fracturing. Consequently, operations to retrieve the drill pipe have been challenging with drill pipe being recovered in lengths of between 1 metre and 120 metres, and operations being required to clean smaller pieces from the well bore.

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