Kurdistan Award

Sterling Energy PLC 12 November 2007 12 NOVEMBER 2007 STERLING ENERGY PLC ('Sterling' or the 'Company') SIGNS PRODUCTION SHARING CONTRACT IN KURDISTAN Sterling (symbol: SEY), an AIM listed independent oil & gas exploration and production company with interests in the Gulf of Mexico and Africa / Middle East, today announces that it has entered into a Production Sharing Contract (' PSC') with the Kurdistan Regional Government of Iraq ('KRG') for the Sangaw North exploration block ('Block'). HIGHLIGHTS • Industry estimates suggest potential for up to 45 billion barrels of oil and 100 tcf of gas in Kurdistan • Sangaw North is a highly prospective block in a proven but largely unexplored area. • Result of long relationship with KRG - Erbil office opened early 2007 and Country Manager in place • Award represents strategic entry for Sterling into the Middle East • Potential to fast track seismic and exploratory drilling adding high impact prospectivity to Sterling's existing exploration portfolio. THE PSC The Block, which covers an area of 492 sq km is located approximately 140 km south east of Erbil and 50 km south west of Suleimaniah. It lies in a highly prospective area around 50km south east of the giant Kirkuk oil field and on trend with the major Taq Taq and Chemchemal oil and gas discoveries. The Block itself contains a large surface anticline with the possibility of multiple reservoir targets, in common with many existing fields in the area, providing strong encouragement for exploration success. The terms of the PSC are in accordance with the terms and conditions published by the KRG. Sterling has 100% interest in the PSC subject to back in rights for the KRG and local industry partners. The PSC has an initial 3 year exploration period during which Sterling plans to acquire some 200km of 2D seismic and drill at least one exploration well. The Company will start work immediately, having already established an office in Erbil in early 2007. It is anticipated that expenditure over this period, including initial costs, could be in the order of $35 million. Sterling's signature of the PSC, together with other recently signed agreements with the KRG, brings the number of international oil companies now working in Kurdistan to 25. Commenting today, Harry Wilson, Chief Executive of Sterling Energy Plc, said: 'We have worked closely with the KRG and are now delighted to have signed this PSC. Kurdistan is a vastly under explored area with huge potential and the prospective Sangaw North Block adds significant high impact exploration to our portfolio. We opened an office in Erbil earlier this year and are now ready to commence exploration operations there. The passage of the Kurdistan Region Oil & Gas Law and the Model PSC have provided an excellent framework for oil and gas investment in Kurdistan and we aim to further develop our activities in Kurdistan and the wider Middle East region. Enquiries Sterling Energy Plc (020 7405 4133) Web site: www.sterlingenergyplc.com Harry Wilson Graeme Thomson Evolution Securities (020 7071 4300) Rob Collins Tim Redfern Citigate Dewe Rogerson (020 7638 9571) Media enquiries: Martin Jackson Analyst enquiries: Kate Delahunty This information is provided by RNS The company news service from the London Stock Exchange

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