The net loss for the quarter was $0.42-million ($nil per common share) compared to $0.40-million ($0.01 per common share) in the first quarter of 2006. Capital spending for the quarter was $2.4-million compared to $3.3-million in the first quarter of 2006. Working capital at March 31, 2007, was $18.7-million compared to $20.7-million at March 31, 2006.
Highlights for the quarter included the following:
--Sterling has a drilling slot for its Breagh appraisal well located in the Southern North Sea. The well will be drilled using the ENSCO 100 jack-up rig and is on schedule for spudding in the third quarter. Sterling has agreed to farm-out terms for an additional 15-percent interest in Blocks 42/12 and 42/13 to RegEnersys, following which Sterling will retain a 50-percent interest and operatorship of the well. Upon completion of the farm-out arrangements Sterling will essentially be carried for the dry-hole costs of the well. --Results from the 24th Offshore Licensing Round were encouraging and Sterling added further blocks in the Breagh area as well as a new area named the Mid North Sea High. In the 24th Round, the Company was awarded 6 licenses covering 13 blocks or part blocks. In total Sterling now holds interests in 15 licenses covering 27 blocks or part blocks. --Onshore UK, results from two seismic programs covering two licenses, Petroleum Exploration and Development License (PEDL) 068 and PEDL 070 became available and plans are underway to drill additional wells later this year. Gas production from the Kirkleatham well (Sterling 47-percent) is expected to commence at a yet undetermined rate in the second half of 2007. --Onshore Romania (Sterling 60-percent interest), processing and interpretation of the year end 2006 seismic program is being completed as well as a detailed source and migration study. The Flounder and Wolf areas remain valid structures and a well is expected to be drilled on one or both of these in the second half of 2007 following completion of the studies. --Offshore Romania (Sterling 100-percent interest), activity during the quarter focused on technical data integration, environmental and drilling planning, and concession terms. Three firm drilling locations have been selected, with the first well potentially commencing by year end. A farm out data room has been commissioned and the first of several interested parties have commenced a review of the prospects.
Mr. Stewart Gibson, CEO, said: "The Company is progressing towards an active drilling program in 2007 with several important wells expected to be drilled before year end. We were particularly pleased to obtain a drilling slot for our Breagh appraisal well located in the Southern North Sea. In addition a well is planned on the Constance prospect (Sterling 35-percent) on Block 21/23a in the Central North Sea in the second half of 2007. Additional drilling is expected on our onshore Romania block and our first operated well offshore Romania could spud by year end."
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