Cladhan reserves could exceed 250 MMbbl

Sterling Resources has updated its assessment of contingent and prospective resources in the Cladhan oil discovery in the UK North Sea (Blocks 210/29a and 210/30a).

Offshore staff

CALGARY, Canada -- Sterling Resources has updated its assessment of contingent and prospective resources in the Cladhan oil discovery in the UK North Sea (Blocks 210/29a and 210/30a).

This follows two successful recent sidetracks from the original discovery well, 210/29a-4. The newly updated estimates have been evaluated by independent consultants RPS Energy.

Sterling’s P50 (best estimate) of Cladhan’s unrisked contingent oil reserves is now 89 MMbbl. The P50 prospective resources have increased to 93 MMbbl for the previously assessed terrace area.

It attributes a further 74 MMbbl of in-place oil of P50 prospective resources to an area off the terrace and in a fan system to the east previously not assessed by RPS Energy.

“These revised contingent and prospective resources numbers independently confirm the magnitude of our recent drilling successes at Cladhan,” said President and CEO Mike Azancot.

“The significant upward revisions from just two new data points in high quality sands in which we have yet to find an oil water contact indicate the large potential for Cladhan. Additional drilling will be required to further delineate the size of this discovery.”

Subject to the completion of current offshore site survey work, conclusion of rig negotiations and regulatory approval from the UK Department of Energy and Climate Change (DECC), Sterling expects to start its next campaign of wells at Cladhan early next year. It has also started evaluation work for potential development scenarios.

Sterling operated Cladhan in License P1064, in partnership with Wintershall and EnCore Petroleum.

10/19/2010

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