Sterling Energy sells US business

Offshore staff

LONDON -- Sterling Energy is selling its US business to a non-USA buyer for $90 million. Further amounts may become payable depending on future oil and gas prices over the next three years, the company says.

Sterling's US business includes exploration and production projects primarily in the onshore Gulf Coast and shallow waters of the Gulf of Mexico. Independent third party and company reserve reports estimate proved and probable reserves of 53 and 41 bcf of gas equivalent respectively, of which 73% is gas and 27% is oil. Average production to date in 2009 is 20.5 MMcf/d of gas equivalent. In the year to Dec. 31, 2008, the company’s US business generated revenues of $83.2 million and a gross profit of $23.5 million.

Completion of the sale is subject to remaining title and environmental due diligence, which is expected to be completed in early December.

“This is an important step for Sterling towards focusing both technical and financial resources on existing higher impact opportunities in Africa and the Middle East where our portfolio of exploration opportunities has the potential to deliver better returns to shareholders,” says Alastair Beardsall, Sterling’s chairman.

10/20/2009