Sterling Resources announces further operational update for Breagh

CALGARY, Nov. 19, 2013 /CNW/ - Sterling Resources Ltd. (TSXV: SLG) ("Sterling" or the "Company") announces that the key physical investigative work has been completed and has identified several damaged elements at the inlet area to the Teesside Gas Processing Plant ("TGPP") at Seal Sands, near Teesside on the east coast of England.

When gas reaches the TGPP, there is a buried junction at which point gas and liquids are taken off above ground to be processed in the plant, and any pigging devices are removed from the pipeline.  The junction is fitted with bars ("Barred Tee-Junction") to guide the pigging devices to pigging reception facilities.

The key findings of the physical investigation to date are as follows:

  • Inspection of the junction has been completed by means of a remotely controlled camera, which showed that the bars within the junction are severely deformed;

  • After removal of the spool piece on the inlet to the gas/liquid separator two damaged pipeline spheres used in pigging operations to sweep the pipeline of liquids were found; and

  • Four thermo-wells between the Barred Tee-Junction and the inlet to the gas/liquid separator, which protrude into the gasline at the inlet to the plant, were severely deformed.  Temperature probes in the thermowells were damaged, thereby creating the indications of abnormal conditions.

Remedial action plans are being developed for rectification of the surveyed damage. Preliminary estimates for return to production is six to eight weeks. A full root cause investigation into the occurrence is ongoing.

"The initial physical investigations have identified areas of immediate repair which are being addressed on an urgent basis," stated John Rapach, Sterling's Chief Operating Officer.   "We are concerned at this occurrence and are working closely with our partner RWE Dea to ensure a thorough understanding of the event.  Once the root cause investigation is complete, a full statement on both progress of repairs, and definitive work scope and schedule will be made," added Mr. Rapach. 

The Breagh field is located in UKCS blocks 42/12a and 42/13a of the Southern North Sea in 62 metres water depth, approximately 100 kilometres east of Teesside. Gas is exported via a 20-inch pipeline from the Breagh Alpha platform to Coatham Sands, Redcar on the UK mainland, and then via an 11 kilometre buried onshore pipeline to the TGPP at Seal Sands for processing. The TGPP site is owned by North Sea Midstream Partners and after processing at the TGPP, the gas enters the UK National Transmission System. During 2009, RWE Dea UK acquired its current 70 percent interest in the Breagh gas field and became operator, with Sterling retaining the remaining 30 percent.

Sterling 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.

Filer Profile No. 00002072

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.  In addition, statements relating to expected production, reserves or resources are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves and resources described can be profitably produced in the future.

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.

Financial outlook information contained in this news release about prospective results of operations, financial position or cash flows is based on assumptions about future events, including economic conditions and proposed courses of action, based on management's assessment of the relevant information currently available.  Readers are cautioned that such financial outlook information contained in this news release should not be used for purposes other than for which it is disclosed herein.

SOURCE: Sterling Resources Ltd.

For further information:

visit www.sterling-resources.com or contact:

Jacob Ulrich, Chairman and Interim Chief Executive Officer, Phone: 44-20-3008-8485, Mobile:  44-7876-346399, jake.ulrich@sterling-resources.com

David Blewden, Chief Financial Officer, Phone: 44-20-3008-8488, Mobile: 44-7771-740804, 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


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