Falls in Interest Rates Reduce Financing Costs $3 Million for Sterling

Recent falls in interest rates are estimated to have reduced Sterling Energy's annualized financing costs by approximately $3 million. Current Group cash balances are estimated at $14 million. Working capital management remains a high priority.

The borrowing base review of Sterling's USA and Mauritanian producing interests, effective from mid-February 2008, has been agreed. This follows completion of the refinancing of all its bank debt in mid December 2007. Sterling will maintain its $154 million borrowings and will have undrawn facilities of $4 million. The next review is effective from mid-July 2008.