Sterling Drills First Side-track in Cladhan Campaign

Sterling Resources Ltd. on Thursday announced the completion of drilling of the 210/30a-4Z well on Block 210/30a in the United Kingdom North Sea. This is the second well (first side-track) drilled in the current four well campaign to appraise further the extent of the Cladhan reservoir.

The 210/30a-4Z well was drilled at a location 1.6 kilometers east and a further 1240 feet downdip of the most recent 210/30a-4 well, utilizing the Transocean Prospect rig from a centrally positioned location. The objectives of the 210/30a-4Z sidetrack well were to appraise the field further east of previous well control and prove sand and oil presence in a fan system considerably deeper than previous wells which have been drilled into channel systems on a terrace structure.

The 210/30a-4Z well was drilled to a total measured depth (MD) of 15,900 feet having encountered two separate Upper Jurassic reservoir zones of 12 and 169 feet (vertical thickness) with oil shows through both intervals. No oil-water contact was encountered. Petrophysical analysis of the open-hole logs showed porosities up to 13.5% but with a high degree of dolomitic cement. Pressure measurements were attempted but not obtained.

"We have been able to prove-up a large depositional feature as prognosed from our seismic interpretation and with hydrocarbons quite deep in the structure," remarked John Rapach, Sterling's Chief Operating Officer. "Our challenge will be to understand the variation in reservoir quality in the eastern area of the field. We are only half way through our current campaign of drilling; the next well will target the central channel and the final well will be drilled to the southern portion of northern channel. These wells are planned into areas with similar seismic characteristics that have already encountered movable hydrocarbons. Success with these wells will build on our resource base inventory and provide further information for our ongoing development planning," added Mr. Rapach.

"While we would have preferred to see better quality sands in what appears to be a large package of oil filled reservoir, this is the first well into a deeper portion of the field and we have to remember that we are still exploring in an area with little well control," stated Mike Azancot, Sterling's President and CEO. "As is usually the case in the early phase of field appraisal, a number of wells are required to delineate the field. The partnership is planning reprocessing of current seismic data along with possible further seismic acquisition, which should improve understanding of reservoir quality variation. We still see much promise in this eastern fan area and we will be updating the geological model potentially to unlock significant prospectivity. Given that the first two wells of the current campaign have still not encountered an oil-water contact, the uncertainty of the prospective oil in place at least in the terrace area has been significantly reduced and should be further refined by the next two wells," added Mr. Azancot.

On completion of this appraisal campaign and following analysis of all data obtained, the partnership intends to commission an updated independent resource evaluation.

Sterling holds a 39.9% interest in license P1064 which contains Cladhan, and is the operator. The partners are Wintershall (UK North Sea) Ltd 33.5 percent, Encore Petroleum Ltd 16.6 percent and Dyas UK Ltd 10.0 percent.

Sterling Resources Ltd. is a Canadian-listed international oil and gas company headquartered in Calgary, Alberta with assets in the United Kingdom, Romania, France and the Netherlands.

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