Bank Waiver Signed

RNS Number : 8970Q

Sterling Energy PLC

21 April 2009

 



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

21 April 2009

STERLING ENERGY PLC

('Sterling' or the 'Company')

Bank Waiver Signed

Sterling (symbol: SEY), an AIM listed independent oil & gas exploration and production company, with interests in the Gulf of Mexico, Africa and the Middle East, is pleased to announce that it has reached agreement with all its syndicate banks regarding the granting of a waiver until mid-August 2009, in connection with the schedule of repayments on its outstanding loans. 

Reflecting the major fall in energy prices in the last few months, the Company’s Borrowing Base at the redetermination date of mid-January 2009 under its syndicated debt facility was approximately US$76 million, leaving a current debt gap of approximately US$27 million. Under the waiver, Sterling expects to continue to service its adjusted cash flow obligations until at least the next scheduled Borrowing Base re-determination, due mid-August 2009. The waiver includes various changes to the terms of the loan, including fees dependent on the timing of the elimination of the debt gap, prior bank approvals of capital costs and a monthly repayment of not less than $1 million under a cash sweep.

Graeme Thomson, Sterling CEO, said:

'Completion of this financing agreement is clearly a very important step forward for Sterling.  I believe it is a testimony to the strong relationships we have with our banks as we work together to put in place a robust, long-term solution to this issue. 

I believe there is inherent value in the production and exploration prospects of our portfolio. In particular, I anticipate that we will spud our first well in Kurdistan on plan in the fourth quarter of 2009.  Sterling has a 53.33% interest in the Sangaw North block and is fully carried for its share of costs, up to the point of testing.  Kurdistan is proving to be a prolific hydrocarbon region where, in recent weeks, there has been yet further exciting news of potentially very significant drilling success.' 

Enquiries

   Sterling Energy Plc ([phone])                           Web site: www.sterlingenergyplc.com 

Graeme Thomson, CEO

Jon Cooper, FD

Evolution Securities ([phone])

Rob Collins 

Chris Sim

Citigate Dewe Rogerson ([phone])

Martin Jackson

George Cazenove

In accordance with the guidelines of the AIM Market of the London Stock Exchange, Andrew Grosse, B.Sc (Hons) Geology & Geophysics (1980), Exploration & Technical Director of Sterling Energy Plc, who has been involved in the oil industry for over 27 years, is the qualified person that has reviewed the technical information contained in this press release.

 

END

 

 

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