CALGARY, July 2, 2013 /CNW/ - Sterling Resources Ltd. (TSX-V: SLG) ("Sterling" or the "Company"), announces a revised plan for sanctioning Phase 2 of the Breagh development and an update on Breagh operations. Previously, operator RWE Dea and Sterling (collectively the "Partnership") were planning to submit the Phase 2 field development plan ("FDP") addendum by June 30, 2013 however based upon the results of the recently drilled A03 production well; RWE Dea and Sterling are now re-evaluating development alternatives with a revised FDP to now be submitted by December 31, 2013. Full FDP approval is anticipated by June 2014 and first gas from Phase 2 by the third quarter of 2016. This revised schedule has been approved by the UK Department of Energy and Climate Change ("DECC").
Since drilling the A03 well, the Partnership has been evaluating the data. The evaluation indicates that the well penetrated a Carboniferous section which has better porosity and higher permeability than previously seen. In addition, once the results of the A05 well, which is currently being drilled, are evaluated the geological model will be further refined for the north and northeastern areas of the field. Consequently, with new information from both wells the Partnership will consider what adjustments need to be made to the currently envisaged Phase 2 development to reflect these results. The Company intends to fund the Phase 2 development from Phase 1 cash flow and potentially from a portion of the escrowed funds from the recent US$225 million bond issue.
"With the large areal extent of the Breagh field of approximately 80 square kilometres, further offshore facilities will be required for the full development of the field," stated John Rapach, Chief Operating Officer for Sterling Resources. "Both RWE Dea and Sterling are committed to exploiting the eastern side of the Breagh field and will tailor well design and facility requirements for Phase 2 based on well results and production data from Phase 1. The A05 well has encountered a similar geological section to the A03 well (which production tested at 56 million cubic feet of gas per day on an 88/64 inch choke with a flowing-wellhead-pressure of 1344 pounds per square inch) and we are very pleased with the results of the well which provides a good stratigraphic correlation," noted Mr. Rapach.
Following the completion of drilling of the A05 well, a production test will be conducted. This will be followed by perforation of the A04 well and production testing. These operations are expected to be completed by early August. Once these production tests are completed, the rig will be relocated to the A06 well site to resume drilling from the 20 inch casing, which was set prior to drilling the A05 side-track.
"The preliminary results of the A05 well are encouraging for the Breagh development," commented Mike Azancot, Chief Executive Officer for Sterling Resources. "Operations continue to progress at the gas terminal with the first production expected in August. We look forward to having the full complement of seven Phase 1 wells on production by the end of 2013," added Mr. Azancot.
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
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 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, delays in production, third party performance failures, 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 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 purpose other than for which it is disclosed herein.
SOURCE: Sterling Resources Ltd.
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]