Sterling Energy – Interim Management Statement

Sterling Energy Plc has issued its Interim Management Statement for the period beginning 1 January 2011.

HIGHLIGHTS

  • Sangaw North-1 exploration well is drilling ahead at 3,760m.
  • Production, net to Sterling from the Chinguetti field, averaged 629 bopd for the first quarter 2011 (Q1 2010: 714 bopd)
  • Adjusted EBITDA in first quarter of $0.6 million (Q1 2010: $2.1 million) (unaudited).
  • Loss after tax in first quarter of $0.5 million (Q1 2010: loss $1.3 million) (unaudited).
  • Cash as at 31 March 2011 of $115.8 million (unaudited), including partner funds of $10.8 million.
  • Exploration programme funded from existing cash, cash flow and partner carry.

Angus MacAskill, Sterling’s Chief Executive, said:

Drilling operations at the Sangaw North-1 well continue to make progress; the parted drill pipe incident that took place during the fourth quarter of 2010 and subsequent fishing and side-track operations took some 115 additional days. However, these latest challenges have been overcome and we are now drilling ahead to evaluate the prospectivity in the Jurassic and Triassic formations.

Kurdistan

The drilling operations at the Sangaw North-1 exploration well continued to present operational challenges during the first quarter of 2011. The well control and parted drill pipe incidents were successfully overcome with the drilling of a side track well bore to a depth of approximately 3,360m and the subsequent running and cementing of a 7″ liner.

Sangaw North-1 exploration well is drilling ahead at 3,760m. The original well design had a planned total depth of 3,660m with an option to continue drilling to a depth of 4,160m. The joint venture partnership has elected to continue drilling to the deeper depth to explore the prospective targets within deeper Jurassic and Triassic formations. For the Sangaw North-1 well, Sterling’s share of drilling costs are carried by Addax, with Sterling paying only its participating interest share (53.33%) of testing costs.

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