Sterling Resources Announces $55 Million Bought Deal Offering and Continuation of the Strategic Review Process

/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/ 

CALGARY, Feb. 19, 2013 /CNW/ - Sterling Resources Ltd. (TSX-V: SLG) ("Sterling" or the "Company") announces that it has entered into an agreement to sell an aggregate of 73,333,333 Common Shares of Sterling ("Common Shares") to a syndicate of underwriters led by Casimir Capital Ltd. (the "Underwriters") on a bought deal basis at a price of $0.75 per share for gross proceeds of $55 million (the "Offering"). Under the terms of the Offering, 20,000,000 Common Shares will be offered by way of a short form prospectus in all of the Provinces of Canada (excluding Quebec) and in certain jurisdictions outside of Canada, including the United States, on a private placement basis. The remaining 53,333,334 Common Shares will be distributed on a private placement basis pursuant to applicable exemptions from prospectus requirements.

Sterling has granted to the Underwriters an over-allotment option (the "Over-allotment Option") to acquire up to an additional 3,000,000 Common Shares at any time and from time to time on, or for a period of 30 days following the closing of the prospectus portion of the Offering, at a price of $0.75 per share, solely to cover their over-allocation position, if any.  In connection with the private placement portion of the Offering, Sterling has granted to the Underwriters an option (the "Underwriters' Option") to acquire up to an additional 8,000,000  Common Shares exercisable not less than two business days before the closing of the private placement portion of the Offering, at a price of $0.75 per share.  If the Over-allotment Option and Underwriters' Option are both exercised in full, the aggregate gross proceeds of the Offering would be $63.25 million.

The Offering is subject to customary conditions and the receipt of required regulatory approvals, including the approval of the TSX Venture Exchange (the "TSX-V") and is scheduled to close on or about March 11, 2013, or such other date as the Company and the Underwriters may agree.

Sterling will use the net proceeds of the Offering of approximately $51.4 million (prior to any exercise of the Over-Allotment Option or the Underwriters' Option) for Breagh Phase 1 development costs and costs relating to the Breagh senior secured loan facility, repayment of the US$12 million loan entered into on December 31, 2012 with an affiliate of The Vitol Group ("Vitol"), certain exploration, appraisal and pre-development expenditures and other corporate purposes. With the proceeds of the Offering the Company is funded through June 2013.

"On February 6, 2013 we announced an update on both our near and longer term capital requirements, and we are very pleased with the Offering which has addressed our near term capital needs," stated Walter DeBoni, Chair of the Sterling Board, adding "Equally important, the Offering will provide us with the appropriate time to undertake a thorough and systematic review of all of our strategic alternatives as announced on February 12, 2013 in response to the unsolicited offer from Vitol."

In an effort to unlock the value of its underlying assets, the Company has been working with RBC Capital Markets to review a full range of options, including:

• A corporate sale, merger or other business combination, which may include discussions with Vitol 
• Joint venture or farm down transaction to accelerate activities in the North Sea and Romania
• Selling specific assets of the Company
• Addressing long term capital requirements via a high yield bond and other forms of financing

"The Board is committed to acting in the best interest of shareholders to maximize value," said Mr. DeBoni, adding "We have believed for some time that our stock price does not reflect the underlying value of our assets. The significant capital required to develop these assets can be accessed through the capital markets or via partnerships and business combinations and we will seek the alternative that delivers the most value for our shareholders."

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 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.  In particular, this document contains forward-looking information and statements regarding: (i) the completion of the Offering, the Over-allotment Option and the Underwriters' Option; (ii) the expected closing date of the Offering; (iii) the use of proceeds of the Offering; (iv) the outcome of the review of strategic alternatives; (v) future capital expenditures and projects; and (vi) the earliest first production date for gas from the Breagh field.

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 purposes other than for which it is disclosed herein.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States, nor shall there be any sale of the Common Shares in any jurisdiction in which such offer, solicitation or sale may be unlawful.  The Common Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act") or any U.S. state securities laws and may not be offered or sold in the United States absent registration under the 1933 Act or an applicable exemption from the registration requirements of the 1933 Act and applicable U.S. state securities laws.

SOURCE: Sterling Resources Ltd.

For further information: visit www.sterling-resources.com or contact:

Mike Azancot, President and Chief Executive Officer, Phone: [phone], Mobile: [phone], [email protected]

David Blewden, Chief Financial Officer, Phone: [phone], Mobile: [phone], [email protected]

George Kesteven, Manager, Corporate and Investor Relations, Phone: [phone], Mobile: [phone], [email protected]