Sterling reported that an independent evaluation of gas in-place at its Breagh and Doina Sister discoveries has confirmed significant in-place volumes which exceed Sterling's pre-well estimates in both areas. The evaluation by RPS Energy, a UK-based engineering company, will progress towards reporting recoverable resources with their next report scheduled for completion in March in line for Sterling's submission of NI 51-101.
Offshore in the UK Southern North Sea, the Breagh structure in Block 42/13 is split between discovered gas in the West Breagh area which was discovered by the 42/13-2 well in 1997 and appraised by the recent 42/13-3 well and, unrisked, undiscovered gas in East Breagh.
For the Western Breagh Structure the Best Estimate (P50) gas in-place is 330 Bcf. For the undrilled Eastern Breagh structure area, the Best Estimate is 467 Bcf of unrisked, undiscovered gas in-place. The High Estimate (P10) of discovered gas in-place is 501 Bcf for West Breagh and the High Estimate of unrisked, undiscovered gas in-place is 668 Bcf for East Breagh.
In the offshore Romanian Black Sea, a Best Estimate gas in-place of 173 Bcf is assigned to Doina Sister which was discovered and tested by the recent well. The High Estimate for Doina Sister is 260 Bcf. In addition, the previously drilled Doina discovery has gas in-place of 103 Bcf and 196 Bcf for the P50 and P10 cases, respectively.
Sterling holds a 45-percent working interest in the Breagh Block together with working interests ranging from 75-percent to 100-percent in the adjoining 11 North Sea blocks. Offshore Romania, Sterling holds a 100-percent interest in the large Midia and Pelican Blocks which contain the Doina gas trend and many other prospects. On completion of agreed farm outs, Sterling's working interest will drop to 65-percent. The Jersey based Gemini Oil and Gas Fund II will be entitled to payments equivalent to a share of Sterling's gross revenue from any future production from Breagh and the Doina gas trend in exchange for providing funding towards both the Breagh and Doina Sister wells.
Onshore France, the rig has been released from the Grenade-3 well. The well has been suspended due to lack of reservoir development at the current location, until such time as the operator reviews the potential to sidetrack the well back towards the original discovery.
Mr Stewart Gibson, CEO, said "We are pleased to have an independent view of the gas in-place at both Breagh and Doina which confirms our post-well result optimism in both areas. We have initiated seismic, site surveys and long lead item commitments to progress the 2008 drilling programs for both these offshore areas. With first gas production in mind, the multi-well programs are designed to include a component of appraisal of the existing discoveries. Breagh and Doina, although significant in their own right, also share the potential for creating new infrastructure which in turn will open up the surrounding areas. Recognizing this, the drilling programs also includes exploration of additional prospects in the immediate vicinity of the recent discoveries."
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