Sterling Drills Ahead at Sangaw North Block

Sterling provided the following update on operations in the Sterling operated Sangaw North block (53.33% working interest) in Kurdistan. 

The Sangaw North-1 exploration well has been drilled to a depth of 3,396 meters, approaching the depth at which the Company plans to run casing prior to drilling into the Jurassic reservoir targets. While drilling at this depth, the well encountered a zone of high formation pressure with the result that hydrocarbon gas, containing approximately 0.5% hydrogen sulfide, entered into the well and pressure was observed at the surface. 

While conducting operations to remove the gas from the well and eliminate the surface pressure, the drill pipe parted at a depth of approximately 850 meters. 

The Company plans to circulate-out any further influx of gas from the well bore, eliminate the surface pressure, and retrieve the drill pipe and bottom hole drilling assembly from the well. These operations are challenging and may require additional equipment to be mobilized to the well site; the Company is unable to provide an estimate of the length of time that will be required to successfully complete them. Once they have been completed, the Company plans to run casing in the well. Sterling will make a further announcement at the appropriate time. 

The entry of hydrocarbon gas into the well, while encouraging, does not provide information as to the potential for material hydrocarbon accumulations in the Jurassic reservoir target. Wire line logs and flow tests will be required to evaluate any potential reservoirs encountered and these have not yet been acquired. 

Alastair Beardsall, Sterling's Chairman said, "Sterling is focused on successfully completing the current operations in a safe and reliable manner. Once this is done, well operations will continue to evaluate the potential of the Jurassic reservoir targets."

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