Interim Results
Sterling Energy PLC
30 September 2004
Sterling Energy plc Interim Results 2004
Highlights
•Osprey acquisition helped double turnover to £5.34 million and increase
pre tax profit by 78% to £1.98 million for the six months ended 30 June 2004
.
•Daily production more than doubled to 8.6mmcfged over the period and US
reserves also increased more than 150% to 60 bcfge at 30 June 2004.
•Realised average gas price remained 'high' at $5.76/mcf over the period
with a further $13million of forward sales to April 2005 locked in at $5.91/
mcf.
•Chinguetti Field in Mauritania declared commercial - development plan
approved.
•Two new exploration licences secured in Madagascar.
•West Africa and Gulf of Mexico drilling programmes commenced with over 20
wells planned over the next year, most of which are 'carried' in Africa.
Chairman's Statement
I am pleased to report significant progress during 2004 which bodes well for the
future of Sterling. The first half of the year has also been a period of
significant consolidation for the Company following the acquisitions of Fusion
and the Osprey assets. I am delighted to say that the management teams have
integrated well and work on all the assets is proceeding smoothly - this is no
small achievement when one considers the impressive pace of growth that has been
maintained. I am also happy to announce that Alan Levison, who has considerable
high-level experience in the energy sector and in African affairs, has agreed to
join the Board as an independent non-executive director.
Financial progress has been strong, with a gross profit of £3.29 million for the
six months to 30 June 2004, almost double that for the corresponding period in
2003 of £1.71 million. This mainly reflects the inclusion of production from the
Osprey fields for the first time from the end of February 2004 and the continued
strong gas prices, which averaged $5.76/mcf for the first half of the year.
Average production in the period was 8.6 mmcfged (first half 2003; 4.2 mmcfged)
resulting in turnover of £5.34million.
Outlook
Sterling has just entered its most active drilling period to date, which will
see the company participate in over 20 wells in Africa and the Gulf of Mexico
over the next year. The majority of the African wells are in Mauritania where
our costs are fully carried. We have recently demonstrated our conviction in the
prospectivity of the Ntem Cameroon license by committing to drill a well - we
look forward to a high impact well on this block in the second half of 2005.
Although smaller than the African upside potential, the Gulf of Mexico drilling
programme is expected to add incremental production and cashflow at lower risk.
We continue to believe that balancing this risk and reward is key to the future
success of Sterling.
Oil & gas prices have been high for some time now and it is tempting to believe
that we will stay in this new price environment at least for the next few years.
Our view is more cautious and consequently we are focusing on extracting maximum
value from our existing assets through organic growth (drilling) rather than
looking at new production acquisitions, which may become cheaper in the not too
distant future. Of course there are always exceptions and we are constantly on
the lookout for value adding deals. Meanwhile, we will continue to grow our
production in the Gulf of Mexico and look for success in our Africa drilling.
The next 18 months promise to be extremely exciting for Sterling.
Richard O'Toole
Chairman 29 September 2004
Operations
Following the takeover of Fusion there has been a focus on consolidation. We
were pleased to retain the services of the key personnel in the Perth office and
have further strengthened the team, which will continue to handle our existing
assets in Africa.
Guinea Bissau
Our only active drilling within the period was the Sinapa 2 well, drilled by
Premier Oil in offshore Guinea Bissau, which proved successful. Sterling has
therefore exercised its option to participate at 5% in this project paying only
its share of future costs. The well discovered light oil in sands of Albian age,
located on the flanks of a large salt diapir. Additional work will be required
before we know if there is a commercial development, but there are a number of
similar features in this very under-explored area.
Sterling retains a 5% option to participate in the neighbouring Esperanca
permit, which will only trigger once Premier has drilled the first well on that
permit. In all, the two permits cover 5,840 km2.
Mauritania
In Mauritania the highlight has been the Declaration of Commerciality and
development approval for the Chinguetti field. The development programme has now
commenced and first oil is expected in early 2006 at 75,000 bopd. Sterling's
interest is held through the deal agreed with Premier by Fusion in 2003, whereby
Premier will pay a sliding scale royalty on every barrel produced under Fusion's
original 6% working interest in PSC B (containing Chinguetti and Tiof
discoveries) and 3% working interest in PSC A.
Meanwhile a significant programme of exploration is planned on both PSC A and B,
which will see at least 9 exploration and appraisal wells drilled in the coming
months. Of immediate interest will be the Capitaine, Merou and Tevet wells, all
in PSC B, which will be drilled to test Miocene objectives directly analogous to
the existing discoveries. Sterling stands to receive from Premier a bonus of
US$2 million in PSC B, $1 million in PSC A, for each further discovery of
greater than 50 million barrels.
Also of note was Hardman's sale of an interest (13.08% in PSC A, 11.63% in PSC
B) to BG Group for US$132 million signalling interest in the development of what
Sterling expects to be significant gas reserves offshore Mauritania. We expect
the initial activity will focus on the Banda discovery, which overlaps PSC's A
and B, which Sterling assesses to have in excess of 2 tcf of gas in place.
AGC
In the AGC (joint zone between Senegal/Guinea Bissau), where Sterling
participates in three exploration licenses, our focus has been on our operated
Croix du Sud (88% interest) permit in deep water. New processing of the 2003 3D
seismic data is showing significant improvement in data quality, and in
prospectivity. Discussions are ongoing with a number of companies interested in
joining us in a drilling programme for 2005/6.
In the neighbouring Cheval Marin permit in the AGC, where we hold a 10%
interest, ExxonMobil has bought a 37% stake from ENI (Agip) and we expect a well
to be drilled on this acreage in 2005.
In the Dome Flore permit (85%), which covers the entire shallow water area of
the AGC, and includes the heavy oil deposits of Dome Flore and Dome Gea,
Sterling has been very encouraged by the discovery of light oil in Sinapa 2,
which has proven the play that Sterling is targeting here - lighter oil trapped
around the flanks of the salt diapirs.
Cameroon
Sterling has now entered the next phase of our deep water Ntem license (100%
interest) and will be drilling a well in 2005/6. As in the Croix du Sud area, we
have been successful in reprocessing the 2003 3D seismic to give much greater
resolution and confidence in the prospects that have been mapped. There is very
significant interest from a number of companies with the capacity to drill and
develop in these water depths, and we hope to be able to announce a farmout deal
in due course.
Gabon
The Iris and Themis 3D surveys have concentrated on untangling the complex
geology of the area and the work is therefore slightly behind schedule. Well
locations have been defined and Sterling should be drilling in the first half of
2005.
Madagascar
New Ventures activity has been high and culminated in the award in July of a 100
per cent interest in two new licenses in Madagascar covering some 34,000 km2 of
undrilled basin. Detailed geological review work will now commence on the
Ambilobe and the Ampasindaya blocks followed by seismic acquisition in 2005/6.
Following this, Sterling has the option to extend each license by drilling an
exploration well. The total license term in each case is 8 years. In the event
of a commercial discovery, a 25 year production license will be granted.
These are very large unexplored areas in which all the necessary components for
petroleum reserves are already established. Madagascar has been neglected mainly
due to past concerns about the economic climate rather than fundamental
exploration potential. The recent farm-in of ExxonMobil and Norsk Hydro to the
Vanco block immediately to the southwest signals a significant change in the
industry view of Madagascar.
Philippines
On our GSEC 101 (Reed Bank) project we have completed engineering studies and
seismic reprocessing and are in discussion with several parties interested in
joining us to acquire 3D seismic over the Sampaguita gas discovery and adjacent
areas. This activity is planned for the first half of 2005, subject to the
availability of suitable seismic vessels.
USA
In the USA the focus in the first half of 2004 has been on building a team of
high quality experienced industry personnel and on delivering the $39.5m Osprey
production deal and its related bank finance.
Our US proven and probable reserves increased to more than 60 bcfge at mid-year
from 23.3 bcfge at the end of 2003, based on a full evaluation carried out by
independent consulting engineers. This increase reflects not only the Osprey
purchase but also an overall increase in reserves in other fields. At current
production rates these reserves are roughly equivalent to over 15 years of
production.
The Osprey deal, completed in late February, brought with it Sterling's first
operatorship, of the five fields, related pipelines and other infrastructure.
The purchase more than doubled reserves, adding more than 30 bcfe in the proven
and probable categories. It has also more than doubled production, which in the
first six months of 2004 averaged 8.6 mmcfged. Recent production sales have been
around 10.5 mmcfged.
With the staffing now up to its complement, Sterling has recently taken-over
operatorship of all but two of its producing interests, thereby allowing it to
better control the pace of any development work. The change to becoming operator
is time consuming and highly regulatory but this transition has now largely been
completed. A great deal of assessment work is well underway of the prospectivity
and optimum development plans for these interests, in addition to the important
matters of day-to-day operations.
We have recently operated our first two capital projects at a net cost of c$0.9
million. Sterling's A-5 sidetrack on High Island A-68 targeted remaining attic
reserves, but encountered non-commercial quantities. A successful workover on
High Island 52 - 3 has stable production on a restricted choke. Detailed
preparations are underway for drilling further wells and workovers by the end of
this year and through next, with the aim still being to once again more than
double the US production.
Financial report for the six months to 30 June 2004
Summary
The six months to 30 June 2004 ('the period') have seen a sustained improvement
in production levels and revenues over prior year levels, as well as a further
increase in profitability. Profit on ordinary activities before taxation in the
period of £1.98 million exceeded the £1.81 million for the whole of 2003.
Profit & loss
Turnover double, prices strong: In the period, turnover increased to £5.3
million, double the level in the first half of 2003 and equivalent to 96% of the
entire turnover for the 2003 year. This reflected an average production level in
the period of 8.6mmcfge/d, more than double that of the first half of 2003 ('H1
03') and more than 60% up on the second half of 2003. Over 95% of production for
the period and the whole of calendar 2003 ('year 2003') was gas. Realised prices
continued to firm, with an average of $5.76/mcf in the period, roughly 4% up on
the year 2003. Sterling has continued to hedge part of its near-term production
and at mid-year had hedged forward to April 2005 a total of 2.2 bcf at an
average price of $5.91/mcf.
Osprey deal has major impact: Approximately 46% of the period's production
related to the $39.5 million Osprey production purchase completed at the end of
February 2004, shown on the profit & loss statement as 'acquisitions' in the
gross profit computations. This purchase more than doubled production levels,
which have, since the end of the period, averaged some 10.5 mmcged. It also
brought with it a further 30+bcfge of proven and probable reserves.
Cost of sales in the period averaged $2.27/mcfge ($1.89/mcfge in H1 03 and $2.10
/mcfge for year 2003). The lower production costs of $0.77/mcfge and increased
depletion charge of $1.40/mcfge largely reflect the impact of the Osprey
purchase.
Gross profit almost doubled: After reflecting the impact of the stronger pound
against the US dollar the gross profit was over £2.1/mcfge, up approximately 8%
over the year 2003. Gross profit in the period was £3.3 million, almost doubled
when compared with the £1.7 million in H1 03 and greater than the £3.19 million
recorded for the whole of year 2003.
Administrative costs rose to a total of £1.08 million (year 2003 £1.48 million).
This increase mainly reflects the increase in the operations team in the Houston
office and the first-time impact of the Perth team acquired with the acquisition
of Fusion Oil & Gas plc in December 2003. Included in costs in the first half
was approximately £0.15 million for reorganisation costs associated with the
Fusion deal.
Operating profit of £2.2m exceeds the total for the whole of 2003: Operating
profit for the period was £2.2 million, double that of H1 03 of £1.1 million and
greater than the whole of the year 2003 of £1.7 million. The impact of the $25
million borrowed to help fund the Osprey deal was reflected in the higher
interest payable and similar charges of approximately £0.3 million. The current
interest rate on this loan is 4.75%. Profit on ordinary activities before
taxation was £1.98 million compared with £1.1 million in H1 03.
The taxation charge of £0.69 million principally relates to the US production
operations, with a tax rate charged of approximately 34%. Due to the level of
capital expenditures on drilling and similar costs, as well as depletion, we do
not estimate any significant current tax to be payable in the period. We have,
however, provided for the resultant deferred tax in full.
Earnings per share lower at 0.15p: Profit for the period was £1.3 million and
earnings per share 0.15p on a diluted basis. The lower earnings per share
largely reflects the impact of the Fusion purchase, completed in April 2004,
increasing the issued share capital to its current 822.6 million, together with
its related funding. The assets acquired are a mixture of exploration, appraisal
and development and so are not currently generating profits.
Balance sheet
Shareholder funds £60.4 million: At the end of the period the equity shareholder
funds had increased to £60.4 million. Following completion of the Fusion
transaction a further approximately 42 million shares have been issued in the
period. The equity minority interest in certain former subsidiaries has now
largely been eliminated following completion of the disposal of the remaining
shares in a subsidiary during the period, with a corresponding reduction in
intangible fixed assets.
Net current assets £9.9 million: At the period end net current assets were £9.9
million (end 2003: £10.4 million). Unrestricted cash has fallen to £6.6 million
at 30 June 2004 from £13.7 million at the end of 2003, largely due to the c$15
million invested in the Osprey production purchase.
Bank loan: The bank loan of $27.3 million outstanding at the end of the period
is classified as long-term as it is not currently repayable until mid 2006. This
is subject to a twice yearly review of the borrowing base, with one such review
currently in progress which will help to determine how best to finance the US
drilling programme. This includes a third party engineering review, and is
expected to be completed in October 2004. There currently remains a 'ring-fence'
of the revenues generated in the US to use in the US operations, including this
secured bank loan.
The increase in provisions to £6.6 million largely reflects the impact of
providing for estimated future abandonment costs related to the Osprey deal.
Cash flow up
The cash flow shows that over £3.5 million was generated from the operations in
the period, before an increase in the debtors/creditors net balance of £2.7
million. This increase partly reflected the increase in working capital for the
Osprey assets, the impact of taking over certain field operatorships in the US,
as well as payments for production which were due in late June but not received
until July.
Investment in tangible fixed assets made in the period of £20.3 million reflects
mainly the Osprey purchase, net of revenues from the effective date of purchase
up to the date of completion. The increase in long term loans of £14.0 million
was that part of this purchase that was financed with an increased bank loan.
The £1.2 million spent on intangible fixed assets related to the cost of work
carried out mainly on the African licences, including related overhead costs.
The first half has been a period of huge change in the operations of the
Sterling group, as is well exhibited in the attached unaudited financial
statements and in the substantial increase in the volume and value of trading in
its shares.
For further information contact:
Harry Wilson, Chief Executive, Sterling Energy plc: 01582 462 121
Graeme Thomson, Finance Director, Sterling Energy plc: 01582 462 121
Allan Piper, First City Financial Public Relations: 020 7436 7486
07736 064 982
Rob Collins, Evolution Securities: 020 7071 4311
www.sterlingenergyplc.com Ticker Symbol: SEY
Sterling Energy plc - Consolidated profit and loss
For the six months to 30 June 2004
Six months Six months Year ended
to 30 June to 30 June 31 December
2004 2003 2003
£000's £000's £000's
(unaudited) (unaudited) (audited)
Turnover
Existing
operations 2,895 2,591 5,253
Acquisitions 2,443 - 280
__________ __________ __________
5,338 2,591 5,533
__________ __________ __________
Cost of sales
Existing
operations (1,327) (879) (2,210)
Acquisitions (720) - (138)
__________ __________ __________
(2,047) (879) (2,348)
__________ __________ __________
Gross profit
Existing
operations 1,568 1,712 3,043
Acquisitions 1,723 - 142
__________ __________ __________
3,291 1,712 3,185
__________ __________ __________
Administrative
expenses
Amounts
written off
intangible
fixed assets (50) - -
Other:
Existing
operations (658) (602) (1,455)
Acquisitions (368) - (26)
__________ __________ __________
(1,076) (602) (1,481))
__________ __________ __________
Operating profit
Existing
operations 860 1,110 1,588
Acquisitions 1,355 - 116
__________ __________ __________
2,215 1,110 1,704
__________ __________ __________
Interest
receivable and
similar income 85 81 219
Interest
payable and
similar
charges (316) (79) (114)
__________ __________ __________
Profit on
ordinary
activities
before
taxation 1,984 1,112 1,809
Taxation (Note 6) (690) (125) (228)
__________ __________ __________
Profit on
ordinary
activities
after taxation 1,294 987 1,581
Minority
interest 1 - 5
__________ __________ __________
Profit for the
financial
period 1,295 987 1,586
__________ __________ __________
Earnings per share:
(Note 7)
Basic 0.16p 0.27p 0.38p
__________ __________ __________
Diluted 0.15p 0.24p 0.33p
__________ __________ __________
As at As at As at
30 June 2004 30 June 2003 31 December
2003
£000's £000's £000's
(unaudited) (unaudited) (audited)
Fixed assets
Intangible
assets 40,502 6,444 49,957
Tangible
assets 32,468 6,058 10,433
__________ __________ __________
72,970 12,502 60,390
__________ __________ __________
Current assets
Debtors 4,130 1,839 1,512
Cash at bank
and in hand 7,910 6,595 14,485
__________ __________ __________
12,040 8,434 15,997
Creditors:
amounts
falling due
within one
year (2,122) (2,070) (5,600)
__________ __________ __________
Net current
assets 9,918 6,364 10,397
__________ __________ __________
Total assets
less current
liabilities 82,888 18,866 70,787
__________ __________ __________
Creditors:
amounts
falling due
after one year
(Note 9) (15,104) - -
Provisions for
liabilities
and charges (6,620) (1,945) (2,626)
__________ __________ __________
Net assets 61,164 16,921 68,161
__________ __________ __________
Capital and reserves
Called-up
share capital 8,227 3,784 7,806
Shares to be
issued - 1,600 1,716
Share premium
account 54,750 14,516 50,753
Currency
translation
reserve (2,076) (577) (1,882)
Profit and
loss account (508) (2,402) (1,803)
__________ __________ __________
Equity
Shareholders'
funds 60,393 16,921 56,590
__________ __________ __________
Equity
minority
interest 771 - 11,571
__________ __________ __________
Total Capital
Employed 61,164 16,921 68,161
__________ __________ __________
Six months Six months Year ended
to 30 June to 30 June 31 December
2004 2003 2003
£000's £000's £000's
(unaudited) (unaudited) (audited)
Profit for the
financial
period 1,295 987 1,586
Currency
translation
adjustments (194) (404) (1,709)
__________ __________ __________
Total
recognised
gains/(losses)
relating to
the period 1,101 583 (123)
__________ __________ __________
Reconciliation of movements in Group shareholders' funds
For the six months ended 30 June 2004
Six months Six months Year ended
to 30 June to 30 June 31 December
2004 2003 2003
£000's £000's £000's
(unaudited) (unaudited) (audited)
Profit for the
financial
period 1,295 987 1,586
Other
recognised
losses for the
period (194) (404) (1,709)
Shares issued
(net of
expenses) 4,418 1,428 41,687
(Decrease)/inc
rease in
shares to be
issued (1,716) - 116
__________ __________ __________
Total movement
in the period 3,803 2,011 41,680
Shareholders'
funds at start
of period 56,590 14,910 14,910
__________ __________ __________
Shareholders'
funds at end
of period 60,393 16,921 56,590
__________ __________ __________
Consolidated cash flow statement (see note 8)
For the six months ended 30 June 2004
Six months Six months Year ended
to to 31 December
30 June 2004 30 June 2003 2003
£000's £000's £000's
(unaudited) (unaudited) (audited)
Net cash
inflow from
operations 887 499 3,340
Returns on
investments
and servicing
of finance (98) 61 168
Capital
expenditure (21,502) (2,544) (5,660)
Acquisitions - - (690)
__________ __________ __________
Cash outflow
before
financing (20,713) (1,984) (2,842)
Financing 13,987 1,428 10,925
__________ __________ __________
(Decrease)/inc
rease in cash (6,726) (556) 8,083
__________ __________ __________
1. There being no distributable reserves, no interim dividend
can be paid for the six months to 30 June 2004.
2. This statement does not comprise statutory accounts as
defined in Section 240 of the Companies Act 1985. Statutory accounts for the
year ended 31 December 2003, on which the auditors gave an unqualified report,
have been filed with the Registrar of Companies.
3. The interim financial information as at and for the six
months ended 30 June 2004 have been neither audited nor reviewed by Sterling
Energy plc's auditors.
4. The financial information included in this document has been
prepared on a consistent basis and using the same accounting policies as the
audited financial statements for the year ended 31 December 2003.
5. The Directors of the Company approved the financial
information included in this interim result document on 29 September 2004.
6. The Group tax charge comprises:
Six months Six months Year ended
to to 31 December
30 June 2004 30 June 2003 2003
£000's £000's £000's
(unaudited) (unaudited) (audited)
Current tax - 125 -
Deferred
tax-origination
and reversal
of timing
differences 690 - 228
__________ __________ __________
690 125 228
__________ __________ __________
The difference between
the current tax charge
of £nil and the amount
calculated by applying
the applicable
standard rate of tax
is as follows:
Six months Six months Year ended
to to 31 December
30 June 2004 30 June 2003 2003
£000's £000's £000's
(unaudited) (unaudited) (audited)
Group profit
on ordinary
activities
before tax 1,984 1,112 1,809
Tax on Group
profit on
ordinary
activities at
standard US
corporation
tax rate of
34% (year
2003: 34%) 675 378 615
Effects of:
Expenses not
deductible for
tax purposes 83 5 64
Income not
assessable for
tax purposes (217) - -
Capital
allowances (in
excess
of)/exceeded
by
depreciation (1,594) 138 (791)
Other
temporary
differences - (4) 12
Difference in
overseas tax
rates - - 1
Adjustment for
tax losses
(see below) 1,053 (392) 99
__________ __________ __________
Group current
tax charge for
the period - 125 -
__________ __________ __________
The Group has generated its results primarily in the US. The tax rate in the
above reconciliation for all periods presented is the standard rate for US
corporation tax.
In deriving the tax charge for the six months to 30 June 2004 the Group has
recognised the utilisation of all of SEI's US taxable losses arising in previous
periods which the directors believe to be available for offset against taxable
profits in this period.
7. Basic earnings per share is based on the profit on ordinary
activities after taxation of £1,295,000 (first half 2003: profit for the period,
£987,000; year 2003: profit for the year £1,586,000) and the weighted average
number of 815,864,161 ordinary shares of 1p each in issue during the period
(first half 2003: 359,305,197; year 2003: 417,759,246). For the six months to 30
June 2004, the fully diluted earnings per share was 0.15p per share. This is
computed based on 844,955,168 ordinary shares, being the total used for the
computation of the basic earnings per share as adjusted in assuming the exercise
of 29,091,007 of the 62,300,000 options outstanding as at the end of June 2004).
A further 4,500,000 options were approved for issue at 15p per share, which are
not exercisable within the first two years.
8. Notes to the cash flow statement
a. Reconciliation of operating profit to net cash flow from operations
Six months Six months Year ended
to to 31 December
30 June 2004 30 June 2003 2003
£000's £000's £000's
(unaudited) (unaudited) (audited)
Operating
profit 2,215 1,110 1,704
Depletion and
depreciation 1,337 441 1,384
Amounts
written off
intangible
fixed assets 50 - -
Increase in
debtors (3,058) (1,166) (726)
Increase in
creditors 343 114 978
__________ __________ __________
Net cash
inflow from
operations 887 499 3,340
__________ __________ __________
Returns on investments
and servicing of
finance
Interest
received 85 81 209
Interest paid
and exchange
differences (183) (20) (41)
__________ __________ __________
(98) 61 168
__________ __________ __________
Capital expenditure
Purchase of
intangible
fixed assets (1,219) (2,448) (498)
Purchase of
tangible fixed
assets (Note 9) (20,283) (96) (5,162)
__________ __________ __________
(21,502) (2,544) (5,660)
__________ __________ __________
Acquisitions
Purchase of
subsidiary
undertakings - - (5,928)
Cash acquired
with
subsidiary
undertakings - - 5,238
__________ __________ __________
- - (690)
__________ __________ __________
Financing
Issue of
Ordinary
shares - 1,428 10,925
Long Term Loan
Finance (Note 9) 13,987 - -
__________ __________ __________
Net cash
inflow 13,987 1,428 10,925
__________ __________ __________
b. Analysis and reconciliation of net funds
At 1 January Cash flow Exchange & At 30
2004 Other June 2004
Movement
£000's £000's £000's £000's
Cash at
bank
and in hand* 13,629 (6,726) (289) 6,614
Debt due
after
1 year - (13,987) (1,117) (15,104)
Debt due
within 1
year (1,117) - 1,117 -
__________ __________ __________ __________
Net
funds/ 12,512 (20,713) (289) (8,490)
(debt)
__________ __________ __________ __________
The cash balance at 30 June 2004 excludes £1,296,000 of restricted cash (end of
2003: £856,000)
9. On 27 February 2004, the Company announced that it had
concluded the acquisition of five producing gas fields in the Gulf of Mexico,
USA from Osprey Petroleum Partners LP for $39.5 million in cash. The
consideration was paid in cash and was funded from a new bank loan facility from
Hibernia National Bank of $27.5 million and from internal cash resources. The
loan, which is repayable on or before 30 June 2006, contains a number of normal
conditions such as a twice yearly borrowing base review and limitation on cash
usage elsewhere in the Group and carries a current interest rate of 4.75%.
10. Further copies of this interim statement are available from the
Company Secretary, Sterling Energy plc, Mardall House, 7-9 Vaughan Road,
Harpenden, Hertfordshire, AL5 4HU, United Kingdom. Telephone +44 (0) 1582
462121, Fax +44 (0) 1582 461221, info@sterlingenergyuk.com
--------------------------------------------------------------------------------
Definitions:
bbls: barrels of oil
bcf: billion cubic feet of gas
bcfge: billions of cubic feet of gas equivalent
boe: barrels of oil equivalent
bopd: barrels of oil per day
mcf: thousand cubic feet of gas
mcfged: thousand cubic feet of gas equivalent per day
mmbbl: millions of barrels
mmcfgd: million cubic feet of gas per day
mmcfged: million cubic feet of gas equivalent per day
tcf: trillion cubic feet of gas
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