Sterling Energy held its AGM, where a number of executives updated future plans for the company. Chairman Dick Stabbins reported that the company is moving forward with exploration programs in Kurdistan and Madagascar.
"I look forward to an active 18 months during which we will focus on delivering results from some of our most exciting 'company making' prospects," said Stabbins. "In particular, we wish to realize the very significant potential of Kurdistan and Madagascar, where we are moving quickly towards drilling our first wells."
"Implementation of the newly adopted strategy of focusing the Company's resources on high impact opportunities in Africa and the Middle East is well under way and already delivering tangible results," said Chief Executive Graeme Thomson. "This can be seen in the recent completion of farmouts and disposals which have contributed to the changing shape of our risk/reward profile and enhanced our cash flows.
"Sales of peripheral properties in the USA for $9 million in cash have recently been or are being completed and there have been six farmouts there," he continued. "The disposal of all of the USA assets, which have averaged production of approximately 29 mmcfged in the year-to-date, is on track with a data room opening shortly and completion expected in Q4.
"A farmout of the 20-40 million barrel Charlie prospect in Gabon was completed yesterday for US$3.3m in cash, plus a carry covering a further 18% of Sterling's 32% share of costs for the well. This is due to spud in late June. Sterling also retains exposure to the upside of a successful drilling campaign and would be carried for approximately half of its costs in any second well there. This farmout could reduce Sterling's costs on these two wells by approximately US$10m.
"Development work in Mauritania is in progress on the Chinguetti field, with two well interventions having been completed. One further well intervention and two development wells are planned which are expected to double field production from its recent level of around 10,500 bopd. An appraisal well on Banda also was successful.
"Independent consultants have evaluated two of our prospects in Kurdistan and Madagascar and indicated unrisked best estimate net prospective resources of over 500 million barrels of oil, with an unrisked high net estimate of 1,900 million barrels of oil net to Sterling's current interests.
Seismic acquisition is planned for Kurdistan by the end of Q3 and drilling is anticipated to commence in 2009. A site survey is presently underway in Madagascar on a very large prospect and we expect drilling in 2009."
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