Sterling Energy plc is pleased to announce that warrant holders have exercised a total of 20,726,152 warrants, raising approximately £1.2 million for the company. The warrants entitled holders to subscribe for new ordinary shares at 6p each.

Nearly 20.5 million of the warrants were placed with institutional and other shareholders at 6.5p. Dealings in the new shares are expected to commence on May 14, 2003. Following the latest placing, 4,028,848 warrants remain outstanding and will continue to be exercisable up to their expiry on June 30, 2003. This represents slightly more than 1% of the 374,518,534 shares in issue.

Harry Wilson, Chief Executive of Sterling Energy, said: “I am delighted that both existing and new investors have demonstrated their support for the company. We are particularly pleased that the placing adds further to our institutional shareholder base, and the funds raised will help us to maintain the excellent progress we have made since we arrived on the Alternative Investment Market last October.”

Sterling’s strategy in the Gulf of Mexico is to acquire proven reserves in fields overlooked by previous owners, using its technical and commercial expertise to unlock upside value.

Sterling’s revenues have grown rapidly from its interests in six producing gas fields in the Gulf of Mexico, where a seventh project is expected on stream later this summer as part of an ongoing development programme. The company also holds 100% of a potential gas exploration licence offshore Philippines.

For further information contact:

Harry Wilson, Chief Executive
Sterling Energy plc: 01582 462 121
Graeme Thomson, Finance Director
Sterling Energy plc: 01582 462 121
Allan Piper, First City Financial Public Relations: 020 7436 7486
Chris Callaway/Rob Collins, Evolution Beeson Gregory: 020 7488 4040

www.sterlingenergyplc.com