Sterling Energy, the AIM-listed (symbol: SEY) independent oil & gas exploration and production company operating in Africa, the Gulf of Mexico and onshore USA, today announces its 2006 Preliminary Results together with an update on progress and outlook.
2006 HIGHLIGHTS:
Revenues up 226% to $81.0 million in 2006 from $24.9 million in 2005
Entitlement sales increased in the year by 172% to an average of 4,400 boe/d
Gross profit up 73% to $26.6 millionNet cash flow from operating activities of $62.3 million (2005: outflow $13.6 million)
Operating profit before amortisation, depletion and impairment provision was $56.2 million in 2006 (2005: $11.6 million)
Operating loss of $46.8 million in 2006 (2005: profit $3.0 million) after non-cash charge of $57.3 million for previously announced Mauritanian assets impairment provision
2006 profit before tax and impairment provision was $13.4 million compared with restated 2005 equivalent loss of $13.3 million
2007 ACTIVITY AND OBJECTIVES
Placing to raise £26.1 million before expenses (c.$50 million) and short-term bank facility of up to $100 million completed
$145 million cash acquisition of US based Whittier Energy Corp. (“WEC”) completed in late March 2007. WEC has drilled 7 successful wells so far in 2007 out of 8 drilledWEC deal increased Group 2P reserves by over 90% to c.24.5 million boe from their end 2006 level of 12.9 million boe
Operator estimate of remaining Chinguetti 2P field reserves increased by 34% to 51 million bbls from Sterling’s end 2006 total. C-18 well drilled and brought onstream
Current Group production of over 6,000 boe/d, an increase of 88% from the first quarter 2007 level of 3,200 boe/d
Record number of wells planned for in the next 12 months, with over 35 wells in the USA and at least 4 in Africa. 2007 Guinea-Bissau drilling was unsuccessful. Licence extension recently granted on Iris Marin, Gabon with commitment to exploration well
Dr Richard Stabbins to become Chairman at the AGM following the decision of Mr Richard O’Toole to retire
Current unrestricted cash of c.$35 million, undrawn bank facilities of $14 million and bank debt of $140 million
Objective is to add to producing assets and near-term developments, participate in international licences and drilling programmes that, if successful, would add materially to the Group’s value
Harry Wilson, Chief Executive of Sterling Energy plc, said:
“The production from Chinguetti in 2006 was disappointing, but with the $145 million Whittier acquisition completed at the end of March 2007, this year has started very well. We now have a stronger financial, operational and strategic base from which to grow and I expect a sizeable increase in production cash flow over the next year. 2007 will be our most active drilling period ever and I look forward to seeing the upside unlocked in our assets. We plan to continue our growth both organically and through acquisition while recognising that the competitive environment requires an innovative approach.”
For further information contact:
Sterling Energy plc (+44 1582 462 121)
Harry Wilson, Chief Executive
Graeme Thomson, Finance Director
Evolution Securities (+44 207 071 4311)
Rob Collins
Citigate Dewe Rogerson (+44 207 628 9571)
Media enquiries: Martin Jackson / George Cazenove
Analyst enquiries: Nina Soon
www.sterlingenergyplc.com
