Sterling Provides 6 Months Results for Chinguetti Field

Sterling Energy Plc, an upstream oil and gas company with interests in Africa and the Middle East, announces its results for the six month period ending 30 June 2012.

In the Chinguetti field, offshore Mauritania, production was re-established following the two unplanned shutdowns in the first quarter. Production during the second quarter supports the lower decline rate previously observed. The Chinguetti field offshore Mauritania continued to produce oil at an average rate of 501 barrels per day during the reporting period. The positive cash flow from Sterling’s share of production exceeds the Company’s general and administration costs and makes a contribution to operations.

The average daily production during the period was approximately 5,857 bopd gross, and 501 bopd net to Sterling. Production in the period was reduced due to two operational interruptions to the supply of gas from the adjacent Banda field that is used for artificial lift in Chinguetti field production wells. Production was shut down in the period between 26 January and 11 February due to a hydrate blockage in the gas pipeline connecting Banda to Chinguetti; this blockage was cleared prior to re-starting production. Production was also shut down in the period 22 March to 30 March due to a failure in the subsea instrumentation controlling the operations of the gas well in the Banda field; the flow of gas from this well was reinstated on 31 March. The average daily production net to Sterling was 401 bopd during the first quarter and 600 bopd during the second quarter.

Production is stored on location in the floating production storage and offloading vessel (FPSO) until a suitable volume is accumulated which is then sold and transported away by sea tanker. Two cargoes were sold in the period, with loading taking place in January and June 2012. Cash from the second cargo totalling $7.1 million is expected to be received in July 2012. There are no approved plans for further development of the Chinguetti field.

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