Sterling Announces Third Quarter 2007 Results
Sterling Resources Ltd. announces its results for the three and nine months ending September 30, 2007. The net loss for the quarter was $0.6-million ($0.01 per share - basic and diluted) compared to $0.3-million ($0.00 per share - basic and diluted) in the third quarter of 2006. For the nine months the net loss was $1.7-million compared to $1.3-million (both $0.02 per share - basic and diluted) in the comparable period in 2006. Capital spending for the quarter was $5.8-million compared to $9.5-million in the third quarter of 2006. For the nine months capital spending was $9.1-million compared to $17.4-million in 2006. Working capital at September 30, 2007 was $11.5-million compared to $21.1-million at December 31, 2006.
The most significant event for Sterling was the drilling of its first operated UK North Sea well which, subsequent to the end of the quarter was successfully tested. The Breagh appraisal well 42/13-3 is located in the Southern North Sea and Sterling has a 45-percent working interest. The Company also holds working interests from 60-percent to 100-percent in a further eleven blocks which surround Breagh. Breagh is Gaelic for beautiful.
Details of the Breagh appraisal well and other highlights for the quarter included the following:
- The Breagh appraisal well on Block 42/13 in the Southern North Sea was drilled to a total depth of 8,047-feet and open-hole logs confirmed a gas-bearing Carboniferous section with an estimated 76-feet of net pay. The well tested, without stimulation, at rates up to 17.6-million standard cubic feet per day from perforations across the interval 7,332-feet to 7,447-feet and the rates recorded are at the top end of the pre-well estimates.
- The Constance well (Sterling 35-percent) drilled in Central North Sea Block 21/23a encountered the Eocene Tay sandstone in both the original and sidetrack locations. The sands were water-bearing and the well was abandoned.
- In the Northern North Sea, the license covering Blocks 210/29a and 210/30a has been extended to allow drilling in 2008. In addition to the farm-out to Revus Energy as previously announced, we reached agreement with Challenger Minerals to farm in on these blocks. Assuming partner and government approvals, this agreement will leave Sterling with a 36-percent working interest. We are also in discussion with other potential farm-in partners.
- Offshore Romania in the Black Sea, Sterling is the operator of the 1.1-million acre Pelican X111 and Midia XV Blocks. During the quarter we completed three agreements which leave Sterling fully funded through the drilling and testing of the Doina Sister prospect, carried through a large share of the Midia SE well, while still retaining an overall 65-percent interest in the blocks. A jack-up rig has been secured and the Doina Sister prospect is expected to spud in mid-December.
- Onshore Romania where we hold a 60-percent interest in the 1.5-million acre Craiova concession, activity has focused on several shallow gas prospects in the central Goshawk area of the block. Drilling is expected to commence in early 2008.
Mr. Stewart Gibson, CEO, said, "The recent increase in drilling activity
promises to accelerate into 2008 which is shaping up to be the busiest year in
the history of the Company. We are planning an active appraisal drilling
program on the Breagh block as well as further exploration drilling on the
adjacent blocks. In addition a well on Block 210/29a is expected to be drilled
in the first or second quarter of 2008. Offshore Romania, in addition to the
Doina Sister well expected to commence in mid-December 2007 we are gearing up
for further appraisal drilling on the Doina trend during 2008 with continued
exploration on a well planned on the Midia SE prospect later in the year.
Further wells are also planned on several of the onshore licenses held by the
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