Over the last 6 months we have made progress with both our existing projects and some potential new ventures; we anticipate building on this progress over the next 6 months with more visible and active exploration activity.
In the Ntem block, offshore Cameroon, exploration activity is suspended as the Ntem contract remains in force majeure due to a maritime border dispute between Cameroon and Equatorial Guinea. Notwithstanding the force majeure status, Sterling has been working with our new partner, Murphy Oil (50% working interest and operator) to determine the best location for the first exploration well. The partners continue to review the status of the border resolution process as both are keen to commence drilling activity when considered appropriate.
Sterling has material interests in two exploration licenses offshore Madagascar in East Africa, a region where exploration activity has been rewarded with some very material hydrocarbon discoveries in recent years. However the change of government in Madagascar in 2009 resulted in Sterling suspending its in-country operations. There is now an agreed 'road-map' towards democratic elections which are expected to be held in late 2012 or early 2013, when it is likely that exploration activity will resume in both licenses.
In the Sangaw North block, onshore Kurdistan, Sterling, and our joint venture partners, have embarked upon an acquisition programme of 130 km of 2D seismic to help identify suitable traps that may have been filled by the working hydrocarbon system seen in the adjacent blocks. The partners expect to interpret the new data and make a decision about drilling a well, in which case the well would be drilled during the current phase of the Sangaw North PSC which expires in November 2013.
Sterling benefits from a strong balance sheet, with $114 million of cash, and no debt. We have screened many new projects with a few meeting the value accretive hurdle we are seeking to deliver. However, a combination of unacceptable risks found during our extensive due diligence processes and competitive forces from our peers has unfortunately resulted in no new projects being added during the period. The addition of new ventures remains a high priority and the team of highly talented specialists recruited over the last 9 months are working diligently to find the opportunities that will offer real value in the success case.