STERLING ENERGY PLC
ANOTHER YEAR OF SIGNIFICANT ACHIEVEMENT

Sterling Energy, the AIM listed (symbol: SEY) independent oil & gas exploration and production company, today announces its Preliminary Results for the year ended 31 December 2004 together with an update on progress since the year end and the outlook.

2004 Highlights:
• Revenue more than doubled to £11.5 million
• Pre-tax profit up 130% to a record £4.2 million
• Operating cash flow increased 144% to £8.1 million
• Production doubled with year-end rate of 10.2 mmcfge/d
• Successful placing of shares at 17p per share raising £97 million
• Funds principally used to acquire c.8% economic interest in the 75,000 bpd (gross) Chinguetti development, offshore Mauritania
• Net proven and probable reserves up 450% to over 21.6 million barrels equivalent
• Life of US interests extended to 15 years
• New exploration acreage acquired in Madagascar

2005 Progress and Outlook:
• Chinguetti development on track for first production in Q1 2006
• Agreement reached to sell non-core Philippines interest to new company intending to float on AIM in 2005
• Virtually carried through an 8-10 well programme in Africa
• Farmout completed in AGC, retaining 30% interest in 800-1,000 million bbl of in place heavy oil discoveries
• Further farmout activity expected
• New licence, exploration and production interests being sought ahead of anticipated significant increase in cash flow when Chinguetti enters production
• US drilling and workovers programme aims to double production there by year-end

Harry Wilson, Chief Executive of Sterling Energy plc, said:

“This has been another year of significant achievement for Sterling. We have moved strongly forward on both an operational and a strategic front. The next few years offer many further exciting opportunities including the anticipated significant increase in cash flow from our Mauritanian interests and the prospects from a substantially increased exploration programme. These will ensure that Sterling is well placed to continue to exploit the growing opportunities in our industry.”

Please download "Preliminary Results 2004" pdf file for full details.

Enquiries

Sterling Energy (01582 462 121)
Web site: www.sterlingenergyplc.com
Harry Wilson
Graeme Thomson

Citigate Dewe Rogerson (020 7638 9571)
Media: Martin Jackson / Rachel Lankester
Analyst: Nina Soon

Evolution Securities (020 7071 4300)
Rob Collins / Henry Turcan