Africa-focused junior oil and gas firm Sterling Energy said Monday that it intends to take advantage of the low oil price by buying "quality" exploration assets from distressed players in the sector.
Commenting on the company's six-month results, Sterling CEO Eskil Jersing said:
"With Sterling's strong balance sheet and active growth mandate, the group sees a clear opportunity to secure quality exploration assets from both distressed players and those re-aligning their portfolios as well as through other entry methods."
Sterling's half-year results showed that it had a cash balance of $106.2 million at the end of June.
However, the firm's revenues fell sharply during the period as a result of the lower oil price and smaller lifting volumes. The firm's net entitlement from the Chinguetti field, offshore Mauritania, decreased 18 percent to 358 barrels of oil per day (1H 2014: 436 bopd). Consequently, the firm's first-half turnover came in at $3.6 million (1H 2014: $9.1 million) and it moved from a profit of $2 million in 1H 2014 to a loss of $1.3 million.
Sterling said that the production performance for the Chinguetti field was consistent with the operator's project 2015 decline rate. The firm noted that earlier in the year it signed agreements to acquire shares in further assets surrounding the Chinguetti field.
The firm is also currently taking part in exploration activities in Somaliland and Madagascar. In the latter case, it completed a 3D seismic acquisition program over the Ambilobe block in late May.
Meanwhile, offshore Cameroon Sterling secured in April this year a 100-percent working interest and operatorship from Murphy Cameroon Ntem Oil Company of the Ntem block, but Cameroon's national oil company Société Nationale des Hydrocarbures has refused to formally recognize a declaration of force majeure by the block's joint venture partners pending the formal resolution of overlapping maritime border claims.
"In Cameroon, the Ntem Concession has returned to force majeure status; however, SNH has not acknowledged the border dispute with Equatorial Guinea as a valid basis for such force majeure. Sterling continues to actively engage with SNH, in order to ensure the remaining exploration potential on block is effectively valorised," Jersing commented.
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