Sterling Announces Kurdistan Rig Contract Award

Sterling, an AIM listed independent oil & gas exploration and production company with interests in the USA, Africa and the Middle East, is pleased to provide the following update on its operations in Kurdistan.

In the Sterling operated Sangaw North block (53.33% WI) preparations are continuing for the drilling of the first exploration well on the licence, Sangaw North-1. The surface well location, total drilling depth of 3,660m (with an option to drill to 4,160m) and rig contract have all been approved by both the Kurdish Regional Government and the joint venture partners. The rig contract has been awarded to Sakson Egypt and the well is planned to spud in late 4Q 2009.

An independent review of the Sangaw North prospect undertaken by RISC (UK) Ltd estimates the unrisked prospective resources for the Cretaceous reservoir interval (at a depth of 1,700-2,900m) are 804 mmbbls (gross), with a chance of success of 27 percent. RISC (UK) Ltd considers that condensate and gas are as likely to be discovered in Sangaw North as oil. Additional potential is also present in the deeper Jurassic and Triassic intervals. Historical success rates for recent exploration wells drilled in the Kurdistan region are around 50%.