CALGARY, Oct. 13, 2015 /CNW/ - Sterling Resources Ltd. (TSX-V: SLG) ("Sterling" or the "Company") notes the announcement by Ineos Group AG ("Ineos") on October 11, 2015 that it has reached agreement to purchase a portfolio of UK North Sea gas fields (the "Assets") from the LetterOne Group (L1").
The Assets include an operated 70 percent interest in the producing Breagh field, of which Sterling holds the remaining 30 percent. The purchase by Ineos brings an end to an extended period of uncertainty going back to September 2014 when RWE AG, the German utility company, announced that it was not certain whether a comfort letter would be received from DECC, the UK oil & gas regulator, in order for it to close its intended sale of the Assets to L1. In March 2015, after RWE had completed the sale to L1, DECC announced that the UK Secretary of State for Energy & Climate Change required LetterOne to sell the Assets. Ineos' news release stated that it was hopeful for completion later in 2015.
"We welcome Ineos' purchase of the L1 assets and look forward to working closely with them to optimise the remaining development of the Breagh gas field," said Jake Ulrich, Sterling's CEO. He continued: "The uncertainty over the future ownership of Breagh has adversely impacted both Sterling's ability to refinance our US$180 million of bond debt and the level and number of offers received in our process to sell or merge the Company, or to sell part of Breagh. The announcement by Ineos is therefore excellent news for all stakeholders. We are continuing to move forward with a refinancing and will seek better offers from existing bidders, as well as new offers from other potential bidders."
Pursuant to the Amended and Restated Bond Agreement dated May 8, 2015 (the "Bond Agreement") relating to Sterling Resources (UK) plc's senior secured bond (the "Bond"), by October 28, 2015 Sterling is required to have pre funded a restricted account with approximately US$32 million to fund the next amortization and interest payment due to Bondholders on October 30, 2015. Sterling expects to have a deficit of approximately $20 million from the cash balance needed to make this payment and to satisfy the minimum unrestricted cash balance of US$10 million from November 1, 2015.
Sterling is a Canadian-listed international oil and gas company headquartered in Calgary, Alberta with assets in the United Kingdom, the Netherlands and France. The Common Shares are listed and posted for trading on the TSX Venture Exchange (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.
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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.
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 news 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 purposes other than for which it is disclosed herein.
SOURCE Sterling Resources Ltd.
For further information: visit www.sterling-resources.com or contact: Jacob Ulrich, Chief Executive Officer, Phone: +1 (403) 237-9256, [email protected]; David Blewden, Chief Financial Officer, Phone: +1 (403) 237-9256, [email protected]; George Kesteven, Manager, Corporate and Investor Relations, Phone: (403) 215-9265, Mobile: (403) 519-3912, [email protected]