Sterling Shareholders Approve Fund Raising for Chinguetti

Sterling Energy reports that its shareholders have overwhelmingly approved the company's £97 million share placing to raise funds principally for investment in the development of the Chinguetti Field, offshore Mauritania in West Africa.

The shareholder approval follows Sterling's announcement earlier this month that it was raising the money to provide funding for the Mauritanian Government on Chinguetti, which is operated by Woodside Petroleum and is due to produce from early 2006 with peak production of 75,000 barrels of oil per day.

It comes as AIM-quoted Sterling hosts a visit to London by the Mauritanian Minister of Industry and Mines, Mr Zeidane Ould Hmeida, for an official signing ceremony to mark the completion of the Chinguetti agreement.

Sterling Chief Executive Harry Wilson said: "Having received such a strong response from new and existing institutional investors to one of the largest ever fund raising exercises on AIM, we are naturally pleased to have received such overwhelming shareholder support at the EGM. We are now looking forward to a fruitful relationship with the Mauritanian Government as it continues to develop its offshore oil industry."

Sterling has raised the £97 million through the issue of 570,588,235 new ordinary shares at 17p per share. It plans to use the bulk of the new funds to pay a $15.5 million signature bonus, and provide a $130 million letter of credit to cover the Government's share of the Chinguetti field development costs. In return, Sterling will receive income from a sliding scale share of the field's production.

The new shares have today been admitted for trading on the Alternative Investment Market. Following admission, there are 1,393,300,558 ordinary shares in issue, of which the new ordinary shares comprise approximately 41%.