CALGARY, Oct. 19, 2012 /CNW/ - Sterling Resources Ltd. (TSX-V: SLG) ("Sterling" or "the Company") is providing an update regarding the anticipated commencement of first production from the Breagh field, as well as positive information regarding recent drilling activities.
Sterling has been advised that the date for first gas sales from the Breagh field is now not expected until around the end of March 2013. This follows the latest review of design work, construction progress and commissioning activities at the onshore receiving terminal, the Teesside Gas Processing Plant (TGPP).
The additional delay in the completion of construction is a result of a number of factors including late design completion, rework of certain systems and late material deliveries. After full completion of this work, final commissioning activities are scheduled to take approximately six weeks. Estimated Phase 1 development costs are now reported by the Operator to have risen to £632 million (100 percent project cost), an increase of 1.4 percent over the cost estimate of £623 million provided in the Company's financial statements for the second quarter of 2012. This increase cost has resulted from a revised cost of additional rock-dumping required on the offshore pipeline, and costs to complete the TGPP modifications and onshore pipeline installation.
The third Phase 1 development well (A-03), which is the first to be newly drilled from the Alpha platform, has now been drilled to a location at a horizontal displacement of 2,300 metres to the north of the platform. Preliminary analysis of the main reservoir has again exceeded expectations, with circa 99 vertical feet of net pay in Zone 1, an increase of 33 percent over the expected thickness. This result, alongside the previously announced positive results with the first 2 wells, A-01 and A-02 (both of which encountered a materially thicker than expected gas-bearing reservoir section), is very encouraging. These first three wells are planned to be flow-tested in November. At commencement of production to the onshore facilities it is expected that four wells will be on-stream.
Commenting on this news, Mike Azancot, Sterling's CEO stated, "We are extremely frustrated and highly disappointed in the further delay to Breagh first gas production. The planning and implementation of activities at the TGPP and the project cost overruns are a source of major concern for us. We will continue to do all that we can as a non-operating partner in the joint venture to ameliorate unacceptable outcomes on this critical part of the project." Mr. Azancot added, "The excellent results from the first new drill in the reservoir underline the fundamental strength of the Breagh field."
Sterling Resources Ltd. 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 shares are listed and posted for trading on the TSX Venture Exchange under the symbol "SLG".
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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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 purposes other than for which it is disclosed herein.
SOURCE: Sterling Resources Ltd.
For further information:
For further information: visit www.sterling-resources.com or contact:
Mike Azancot, President and Chief Executive Officer, Phone: 44-20-3008-8488, Mobile: 44-7740-432883, [email protected]
David Blewden, Chief Financial Officer, Phone: 44-20-3008-8488, Mobile: 44-7771-740804, [email protected]
George Kesteven, Manager, Corporate and Investor Relations, Phone: (403) 215-9265, Mobile: (403) 519-3912, [email protected]