Sterling Energy plc announces its results for the six month period ending 30 June 2020. The Company is an experienced operator of international exploration and production licences, with a primary geographic focus on emerging markets including, Africa and the Middle East, although the Board would consider other regions for material opportunities. The Group has a high potential exploration asset in Somaliland and an active strategy to deliver shareholder value through disciplined, exploration and production projects; leveraging the Company’s experience, with an emphasis on securing near term cash flow generative opportunities.
Operations summary
• Odewayne block, Somaliland - Operating Committee Meetings (‘OCM’) held in Q3 2020 where the Operator presented an update on their latest technical work.
• The final products of the reprocessing of 1,000km of 2D seismic data to Pre-Stack Time Migration were delivered Q1 2020. Sterling’s assessment of the technical data is underway.
• Sterling continued to support the Operator in progressing the technical understanding of the block.
Corporate summary
• Continued merger and acquisition (‘M&A’) mandate for transformational growth (asset and corporate options).
• Screened over 20 separate opportunities globally in 2020 with 3 of these progressing to the level of indicative offer (one of which from 2019 remains under consideration).
• Both asset and corporate screening levels remain high. Sterling has noted an increase in the number of M&A opportunities on the market due to the impact of Covid-19, and remains well positioned to capitalise on potential
future opportunities.
Financial summary
• Cash resources as at 30 June 2020 of $43.8 million (30 June 2019 of $45.5 million).
• The Group remains debt free and fully carried for Odewayne operations (Third and the Fourth Period).
• Adjusted EBITDAX loss of $289k (1H 2019: loss $256k).
• Loss after tax of $870k (1H 2019: loss $603k).
• Ongoing focus on capital discipline, cash general and administrative overheads (‘G&A’) reduced by ca. 3% to $1.1 million (1H 2019: $1.1 million). A further ca. 10% decrease is forecasted for the 2020 full year in comparison with 2019 full year costs of $2.6 million.
• Proactive focus on treasury management, with interest received totaling $288k (1H 2019: $574k).
