Sterling Energy plc, the independent oil and gas company quoted on London’s Alternative Investment Market, has raised £5 million through a placing of 90,910,000 new ordinary 1p shares with institutional investors. Dealings in the placing shares are expected to begin on December 24.

Sterling Chief Executive, Harry Wilson said: "I am delighted this round of financing has been so strongly supported by a range of institutional investors, both existing and new. Their commitment to Sterling broadens our shareholder base and further underlines the City’s confidence in our management team. The new funds will enable us to accelerate the development of our existing assets and puts us in a stronger position to take on new projects.”

The placing shares were placed at a price of 5.5p per share, and will provide Sterling with approximately £4.75 million net of expenses. The placing shares represent approximately 26% of the company’s enlarged issued share capital. Shares in Sterling started trading on AIM in October at 4p, following a reverse takeover and a successful £2.4 million placing and open offer.

Sterling has a portfolio of five cash-flow producing gas fields offshore USA in the Gulf of Mexico. The group also owns a 100% working interest in a large exploration license offshore Philippines, with some 600 billion cubic feet of potential gas reserves, for which it is evaluating the potential for development through gas-to-liquids technology.

In October, Sterling announced the purchase of a 17.5% working interest in the Galveston 303 license offshore Texas; it has already paid back its initial cash cost and is generating cash of around $60,000 per month. Earlier this month, a successful additional well drilled on a nearby gas field, in which Sterling has a royalty interest, was announced. This well was drilled at no cost to Sterling. Based on current projections, it is expected to add over $180,000 per month to its pre-tax cash flow when on-stream.

Sterling’s strategy is to acquire producing assets in areas neglected by previous owners, to use its own technical and commercial expertise to unlock upside value and to develop a portfolio of international exploration and drilling interests.

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, Evolution Beeson Gregory: 020 7071 4324