Sterling Resources announces second quarter 2008 results and updates drilling activity

    CALGARY, Aug. 19 /CNW/ - Sterling Resources Ltd. ("Sterling" or the
"Company") today announces interim operating and financial results for the
quarter ended June 30, 2008. Unless otherwise noted all figures contained in
this report are denominated in Canadian dollars.
    Sterling's activity during the second quarter focused primarily upon the
commencement of our offshore drilling program, planned for the second half of
2008. Site surveys were completed, environmental approvals obtained and three
offshore drilling rigs have been contractually secured. Drilling of the first
of these wells has been successfully completed in offshore Romania and in
mid-August the jack-up rig for the offshore UK commenced operations with the
East Breagh well (42/13-4) spudding early on August 18.
    "Our focus during the first half of the year has been upon laying the
ground work for the execution of the drilling programs in the UK North Sea and
offshore Romania. With these important planning milestones completed, we are
excited to be back completing appraisal and exploration drilling in and around
our significant discoveries in the UK and Romania. We were pleased to announce
on August 14 the successful completion of the Doina-4 well, the first of a
number of wells to be drilled during the remainder of 2008", stated Stewart
Gibson, Chief Executive Officer of Sterling.

    Second quarter financial highlights for 2008 included:

    -  net loss was $1,001,700 ($0.01 per common share - basic and diluted)
       during the second quarter of 2008 compared to $715,445 ($0.01 per
       common share - basic and diluted) for the second quarter of 2007; and

    -  net capital expenditures were $4,107,806 during the second quarter of
       2008 compared to $888,594 for the second quarter of 2007; and

    -  net working capital was $53,149,711 as at June 30, 2008 compared to
       $10,858,095 at December 31, 2007.

    Key operational achievements during the second quarter of 2008 included:

    -  Early in the second quarter, we contracted the ENSCO 70 jack-up rig to
       complete our planned three well program in the UK Southern North Sea.
       Originally expected to commence work for Sterling in July, the rig
       remained with the previous operator until early August due to
       additional well operations. Now on contract to Sterling, the rig moved
       to the first well in East Breagh, of which Sterling holds a 45 percent
       interest, and started drilling on August 18.

    -  The planned infill seismic program across Blocks 42/8 and 42/9
       (Sterling 60 percent interest after farm-out) was completed during the
       quarter and the data is currently in for processing. The survey was
       planned to assess the economic feasibility of additional drilling in
       the area immediately north of the Breagh gas discovery. The surveyed
       area is part of the greater Breagh area, which as previously reported,
       was recently farmed out to Petro Ventures International Limited.

    -  We participated in the recent UK Offshore 25th Licencing Round,
       however our level of success in obtaining additional licences will not
       be known until late 2008.


    -  During early July we announced the contracting of the Prometeu jack-up
       rig to drill follow-up appraisal wells to the Doina and Ana (formerly
       Doina Sister) discoveries, of which Sterling holds a 65 percent
       interest after farm-out. The rig moved to the Doina-4 location in late
       July and we reported on August 14, 2008 the successful completion of
       this well to a target depth of 1,250 metres. Given the equivalent
       reservoir was tested in the previously drilled Doina-2 well at 17.5
       million cubic feet per day, and calculations for the current well
       indicate similar productivity potential, the Doina-4 well has been
       suspended for possible re-entry as part of any future development

    -  The option to drill a second well, referred to as Ana-2, with the
       Prometeu rig has been exercised. Ana-2 is planned as a directional
       step-out well from the same seabed location as Ana-1.

    -  The Eleventh Amendment to the Exploration and Production Sharing
       Agreement, which will convert it to a tax royalty agreement, continues
       to move through the government approval process and is still expected
       to be converted before year end. In terms of the ongoing border
       discussions between Romania and Ukraine, we understand that the
       International Court will enter the next phase of the process in
       September of this year in order to move the issue closer to

    -  In the Craiova concession onshore Romania (Sterling 60 percent), plans
       for the drilling of three wells targeting shallow gas have been
       delayed, largely due to the very wet conditions at one of the planned
       sites. However, we still intend to have drilling commence before year
       end 2008.


    -  On August 6, 2008 we completed a bought deal financing of 11,274,600
       units, including an underwriter's option which was exercised in full
       at closing. Each unit comprises one common share of the Company and
       one half-warrant at a price of $2.55 per unit. Each full warrant
       entitles the holder to purchase one common share at a price of $3.25
       until 4:30 PM Eastern Time on August 6, 2009. In addition, the Company
       has the right to accelerate the exercise of the warrant if the closing
       price of the Company's shares on the TSX Venture Exchange is at least
       $4.00 for any period of not less than 15 consecutive trading days at
       anytime after December 7, 2008. The net proceeds of the issue after
       expenses and underwriter's commissions were approximately $27,150,000
       and will be used primarily towards financing the Company's 2008
       appraisal well drilling program.

    Sterling Resources is a Canadian-listed international oil and gas company
headquartered in Calgary, Alberta with assets located in the United Kingdom,
Romania, and France. The common 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
    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
    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.

    %SEDAR: 00002072E

For further information:

For further information: visit or contact
George Kesteven, Manager, Investor Relations, Phone (403) 215-9265/Fax: (403)
215-9279,; Stewart G. Gibson, Chief Executive
Officer, Phone: 44-133082-6717/Mobile: 44-7768-042219,; Ian Hornby-Smith, Chief Financial Officer,
Phone: (403) 215-9264/Fax: (403) 215-9279,

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