Sterling Energy Signs TEA for Ibekelia License in Gabon

Sterling has signed a Technical Evaluation Agreement for the Ibekelia license. The agreement has been signed with the Gabonese government and Sterling (40% interest & operator) The agreement covers a 673 km2 area which is contiguous with the Gamba and Olowi oil fields and Sterling's existing Themis Marin and Iris Marin licenses. The evaluation term is 12 months at the end of which there is an option to convert to a full Production Sharing Agreement.

Having reached a depth of 2035 m, the Iris Iboga Marin No 1 well penetrated over 30 meters of excellent reservoir-quality sub-salt Gamba sandstones but unfortunately these were water bearing. Accordingly the well is now being plugged and abandoned. A further exploration well is scheduled in the Themis Marin license commencing in 1st quarter of 2006. Sterling will again be carried for most of its 20.57% working interest and will pay only 2.57% of the costs.