Shares in Sterling Energy (LSE: SEY), which has operations in the Kurdistan region of Iraq, fell 10% on Thursday morning following an Interim Management Statement for the period beginning 1 July 2010.
· Sangaw North #1 exploration well is drilling ahead at 2,927m.
· Production, net to Sterling from the Chinguetti field, averaged 621 bopd for the third quarter 2010
· Adjusted EBITDA in third quarter of $2.8 million (unaudited).
· Profit after tax in third quarter of $3.1 million (unaudited).
· Cash as at 31 October 2010 of $110.4 million (unaudited), including partner funds of $4.4 million.
· Exploration programme funded from existing cash, cash flow and partner-carry.
Alastair Beardsall, Sterling's Chairman, said:
"Operations at Sangaw North #1 continue to present challenges. However the drilling team continue to make progress in evaluating the prospectivity of the structure. Flow tests of two zones within the Cretaceous section have demonstrated that hydrocarbons are present but neither test delivered commercial flow rates. These zones may be stimulated and re-tested later, when the well has reached total depth. The progress of our projects offshore Cameroon and Madagascar remains slow as we wait for those countries to resolve their border and political issues, respectively."
The Sangaw North #1 exploration well is drilling ahead at 2,927m.