Sterling Energy to Acquire Whittier Energy for $188 Million

Whittier Energy has entered into a definitive merger agreement with Sterling Energy plc under which Sterling will acquire all of the outstanding shares of Whittier for $11.00 per share in cash resulting in aggregate merger consideration payable to Whittier equity holders of approximately $145 million. Sterling will also assume approximately $43 million of Whittier net liabilities.

The Boards of Directors of Whittier and Sterling have unanimously approved the transaction. In addition, Whittier Ventures LLC, holder of approximately 14.34% of the outstanding shares of Whittier, has agreed to vote in favor of the transaction. The transaction is subject to routine regulatory approvals and other customary conditions as well as approval by Whittier's stockholders. The transaction is expected to be completed in the first quarter of 2007.

Bryce Rhodes, President and Chief Executive Officer of Whittier said; "This transaction allows Whittier Energy stockholders to realize substantial value at an attractive premium. It is keeping with our stated strategy from the outset of creating value for our stockholders by monetizing at the appropriate time. This has all been made possible by the very talented team of Whittier directors and employees. Their hard work and dedication has made the rapid growth of the Company possible and has resulted in significant value for all the Whittier stockholders and I'd like to take this opportunity to say thanks to each of them."

Ferris, Baker Watts, Inc. is acting as lead financial advisor to Whittier. BMO Capital Markets also advised the Company and rendered a fairness opinion to Whittier's Board of Directors. Thompson & Knight, LLP acted as the Company's legal advisors.

Whittier Energy Corporation is an independent oil and gas exploration and production company headquartered in Houston, Texas, with operations in Texas, Louisiana and Mississippi. Whittier Energy also holds non-operated interests in fields located in the Gulf Coast, Oklahoma, Wyoming and California.

Sterling is an independent oil and gas exploration and production company formed in October 2002 and listed on the Alternative Investment Market of the London Stock Exchange. Sterling has built a portfolio of production assets in the Gulf of Mexico and offshore West Africa and has an active exploration program focused predominantly on Africa.

Sterling has expanded its U.S. operations to include the onshore Texas and Louisiana Gulf Coast. In addition to production from Mauritania, Sterling has built a portfolio of African exploration interests including Madagascar, Gabon and Cameroon.