Sterling Resources signs project financing mandate letter providing first step towards securing Breagh project financing



    CALGARY, Aug. 6 /CNW/ - Sterling Resources (TSX-V: SLG) ("Sterling" or
"the Company") is pleased to announce that it has signed a non-binding project
financing mandate letter with The Royal Bank of Scotland plc ("RBS").
Following Sterling's July 22nd announced sale of one third of its working
interest in the Breagh field and varying percentages of its surrounding
exploration acreage for approximately CAD$103 million, the Company has been
considering a number of options to finance the future development costs
associated with the 30% working interest in Breagh it retains.
    Under the terms of the mandate letter, RBS will assume the role of debt
structuring bank, leading a syndicate of lenders to arrange project financing
for the Breagh field development. The selection of RBS, a domestic UK lender
with global operations, as syndicate lead is consistent with recent UK
government initiatives encouraging the financing of oil and gas projects
designed to further expand domestic UK petroleum supplies.
    Stewart Gibson, Sterling's Chief Executive Officer stated, "We are very
pleased to move forward with RBS towards achieving a final agreement to
arrange adequate financing to take us to first gas production at Breagh. With
this financing in place and in concert with our new Breagh partner RWE Dea UK
SNS Limited, we will be able to focus upon the construction of pipeline and
related infrastructure, which will further support additional drilling in this
new developing sector of the UK Southern North Sea."
    Hurbinder Mudan, head of oil and gas project finance at RBS said, "We are
delighted to be moving forward with Sterling on the exciting Breagh Project,
being a new major source of gas supply for the UK. We have worked with
Sterling on the project for some time now and are very familiar with the
Breagh story. We see the new RWE Dea partnership as enhancing the project and
look forward to working with the Sterling team."

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

    
    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release.
    

    Forward-Looking Statements

    All statements included in this press 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 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 press 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 press 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 press release should not be used for
purpose other than for which it is disclosed herein.

    %SEDAR: 00002072E




For further information:

For further information: visit www.sterling-resources.com or contact:
Stewart G. Gibson, Chief Executive Officer, Phone: 44-133082-6717, Mobile:
44-7768-042219, stewart@sterling-resources.co.uk; George Kesteven, Manager,
Corporate & Investor Relations, Phone: (403) 215-9265, Fax: (403) 215-9279,
george@sterling-resources.com


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