Drilling Report

Sterling Energy PLC
23 December 2003

                        Sterling Energy PLC ('Sterling')



                                Drilling Report


The Board of Sterling Energy plc would like to bring to shareholders' attention
the following announcement on the Tiof West appraisal well offshore Mauritania,
posted this morning by Hardman Resources Ltd ('Hardman'). Sterling's subsidiary,
Fusion Oil & Gas plc, has a royalty interest in the Tiof discovery.



The full text of Hardman's announcement is included below:





'Hardman Resources Ltd ('Hardman') provides the following weekly progress report
on the drilling and testing operations in offshore Mauritania:



                    TIOF WEST EXPLORATION WELL (PSC AREA B)



Hardman is pleased to report on further results from the Tiof West oil discovery
well, located approximately 8 kilometres to the west of the initial Tiof-1
discovery well.





Progress:             The Tiof West exploration well was spudded on 8 December
by the drillship 'West Navigator' and has been drilled to a total depth of 2,991
metres.  Since the last report (16 December) wireline logging operations were
completed, including the collection of seven oil samples and one gas sample from
the hydrocarbon bearing interval.  The well was then plugged and abandoned on 21
December 2003, as planned.



Hydrocarbon Shows:    As previously advised, evaluation of the wireline log and
RCI pressure data indicates that the Tiof West well has intersected a total
gross hydrocarbon column of 126 metres comprising an upper 4 metre gas interval
overlying a 122 metre oil column above the confirmed oil water contact.  The
upper 4 metre gas interval is interpreted as an isolated gas sand within a
larger gross oil column, as the oil column in Tiof West is structurally lower
than the oil column in the Tiof-1 well.  Of significance is the fact (reported
by Woodside, 16 December) that the pressure data from the oil columns in both
Tiof-1 and Tiof West are likely to be in direct communication, indicating a
common oil pressure gradient across the larger Tiof Field.







Based on the common oil pressure gradient in both wells, a total gross oil
column for The Tiof Field is estimated to be 214 metres, from the top of the
oil column in Tiof-1 to the base of known oil in Tiof West. The Tiof Field has
a relatively small gas cap as indicated by the 46 metre gross gas interval in
the Tiof-1 well drilled near the  structural crest.







The net to gross reservoir ratio (net sandstone distribution) for the Tiof Field
is expected to be similar to that encountered in the Chinguetti Field. 
Reservoir quality in the Miocene sandstone systems varies depending on whether
the well has intersected a channel centre or the more shale prone flanks of the
channels.  Further appraisal drilling will be required to assess the
connectivity and the net to gross ratio of the reservoir section in the Tiof
Field.


 Hardman's technical staff have now undertaken preliminary mapping of the 3D and
2D seismic data over the Tiof-1 - Tiof West structure.  The structural closure
of the Tiof Field has a mapped area of approximately 54 square kilometres.  On
the basis of this area, the gross oil column indicated from both wells and the
initial reservoir data,

Hardman has estimated a potential field size of between 300 to 400 million
barrels recoverable (statistical mean estimate).







Participants in the Tiof West exploration well and PSC Area B are:







Woodside Mauritania Pty Ltd (Operator)                      35.0%

AGIP Mauritania BV                                          35.0%

* Hardman Resources Ltd                                     21.6%

Fusion Mauritania B Limited                                  6.0%

Roc Oil (Mauritania) Company                                 2.4%







   *     Note:  As previously reported, Hardman Resources Ltd has entered into
an agreement with Woodside and the other non-Agip joint venture partners to
purchase on a pro-rata basis the 35% equity in PSC Area B held by Agip
Mauritania BV.  The acquisition of Agip's interest is expected to be completed
in the first quarter of 2004 at which time Hardman's equity will increase from
21.6% to 33.2% in PSC Area B, which includes the Chinguetti and Tiof Fields.







                      PELICAN-1 EXPLORATION WELL (BLOCK 7)





Progress: The Pelican-1 exploration well was spudded (commenced
drilling) on 30 November 2003. Since the last report (16 December), the well was
drilled in 17 1/2 inch hole size to 3,356 metres depth and 13 3/8 inch casing
was run and cemented.  At 0800 hours  (Australian WST) on 23 December 2003
preparations were underway to drill ahead in 12 1/4 inch hole size.



Geology and Hydrocarbon shows: Hydrocarbon shows will only be reported after
wireline logs have been evaluated at total depth of the well.



Well Location: The Pelican Prospect is located approximately 150
kilometres north of the Chinguetti Oil Field in PSC Block 7.  The well, which is
in approximately 1,700 metres water depth, is planned to be drilled to a total
depth of about 3,800 metres (includes  water depth).



Prospect Details:        The Pelican-1 exploration well will test a large
structural closure with multiple  objectives within the Tertiary and Upper
Cretaceous sequences.





The Pelican-1 exploration well is being drilled by the drillship 'Jack Ryan'
which has remained in Mauritanian waters since completing production testing of
the Chinguetti 4-5 Early Development Well.  Woodside Energy Limited is managing
the drilling of the well on behalf of the Block 7 operator, Dana Petroleum plc.



Participants in the Pelican-1 exploration well and PSC Block 7 are:





Dana Petroleum plc Ltd (Operator)                            80.0%

Hardman Resources Ltd                                        18.0%

Roc Oil (Mauritania) Company                                  2.0%





Note:  All reported depths (except water depth) are referenced to the rig rotary
table.'





23 December 2003




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