Sterling Resources Announces Successful Breagh Well A07 Fracture Stimulation and Well Test

CALGARY, June 16, 2014 /CNW/ - Sterling Resources Ltd. (TSX-V: SLG) ("Sterling" or the "Company") is pleased to advise that fracture stimulation and production testing of Breagh well A07 have been successfully completed.

After several days of flowing the well to clean it up, the well was production tested at a stabilized rate of 32 million standard cubic feet per day (100 percent) at the planned initial operating conditions of the well. The performance achieved under these conditions represents an estimated two to three-fold increase in production rates over what would have been expected if the well had been completed with the standard completion used in the Breagh field to date. The well will now be tied into production over the summer in parallel with the drilling of well A08, which should commence within the next two weeks.

The A07 well was drilled during the fourth quarter of 2013 to a location approximately 2 kilometres to the south-east of the Alpha platform, encountering 100 feet of net pay in two separate zones.  The well was suspended in early January 2014 to release the ENSCO 70 drilling rig for a planned period of maintenance and upgrade.  The rig arrived back on location at Breagh in early May and re-entered A07 to commence operations with the assistance of the Schlumberger Big Orange XVIII well-stimulation vessel. Fracture stimulations were performed over the two reservoir zones, Zone 1, which is the main productive zone and reserves base in the Breagh field, and Zone 3, which Sterling currently classifies as contingent resources.  A total of 179,500 pounds of proppant was pumped.  The estimated overall cost of the fracture treatment is approximately US$10 million (100 percent interest), or US$3 million net to Sterling.

"These results have exceeded our expectations," stated John Rapach, Chief Operating Officer for Sterling Resources.  "We achieved a marked improvement on Zone 1 production rates.  The results are also very relevant for the Phase 2 development of Breagh on which we continue to work with Operator RWE Dea to firm up the plans for submission of a Field Development Plan Addendum," added Mr. Rapach. 

Jake Ulrich, Chief Executive Officer for Sterling Resources, also commented, "After the lower than expected initial rate from some of the Breagh wells and the delays in production due to the unplanned shut-ins, it is particularly pleasing to announce an excellent result with the first fracture stimulation.  This will have significant positive implications for the ongoing development of the Breagh field and the future cash flow that we expect to receive."

Sterling Resources is a Canadian-listed international oil and gas company headquartered in Calgary, Alberta with assets in the United Kingdom, Romania, France and the Netherlands. The common shares are listed and posted for trading on the TSX-V under the symbol "SLG".

Neither the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.

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Forward-Looking Statements

All statements included in this news release that address activities, events or developments that Sterling expects, believes or anticipates will or may occur in the future are forward-looking statements.

These forward-looking statements involve numerous assumptions made by Sterling based on its experience, perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances.  In addition, these statements involve substantial known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other-forward looking statements will prove inaccurate, certain of which are beyond Sterling's control, including: the impact of general economic conditions in the areas in which Sterling operates, civil unrest, industry conditions, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities. In addition there are risks and uncertainties associated with oil and gas operations.  Readers should also carefully consider the matters discussed under the heading "Risk Factors" in the Company's Annual Information Form.

Undue reliance should not be placed on these forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur.  Sterling's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements.  These statements speak only as of the date of the news release. Sterling does not intend and does not assume any obligation to update these forward-looking statements except as required by law.


SOURCE Sterling Resources Ltd.

For further information:

visit www.sterling-resources.com or contact:

Jacob Ulrich, Chief Executive Officer, Phone: (403) 237-9256, jake.ulrich@sterling-resources.com 

David Blewden, Chief Financial Officer, Phone: (403) 237-9256, david.blewden@sterling-resources.com

George Kesteven, Manager, Corporate and Investor Relations, Phone: (403) 215-9265, Mobile: (403) 519-3912, george.kesteven@sterling-resources.com