Sterling Energy updates Madagascar drilling plans

Sterling Energy is evaluating the Ampasindava and Ambilobe PSC's, where several large structures have been identified.

Offshore staff

LONDON -- Sterling Energy is evaluating the Ampasindava and Ambilobe PSC's, where several large structures have been identified. One of the largest, the Sifaka prospect in the Ampasindava PSC, is being progressed for drilling, potentially in the second half of 2009, the company says

Potential drilling locations on the Sifaka prospect have been identified and a site survey was acquired in June 2008, the company says. The Sifaka prospect lies in water depths ranging from 500 to 1,900 m (1,640 to 6,234 ft) and has an unrisked best estimate resource potential of 1.1 Bbbl with an upside of 4.8 Bbbl. According to the company, there are a number of large follow-on leads on block which together with Sifaka have the potential to establish Madagascar as a significant hydrocarbon producer.

The drilling of the Sifaka prospect will be the very first well to test the deepwater potential of Madagascar and comparisons have already been made to the prolific basins of Angola. Expected drilling costs will materially exceed Sterling's remaining carry in the Ampasindava PSC, and the company plans to further farm-down its interest in the permit.

Sterling has a 30% working interest in the two blocks, totaling 26,460 sq km (10,216 sq mi) offshore northwest Madagascar, with ExxonMobil as a 70% partner in both blocks. In the smaller Ampasindava PSC, ExxonMobil is the operator, while Sterling is the operator in the larger Ambilobe PSC.

10/01/2008

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