Kurdistan Update

RNS Number : 4985X

Sterling Energy PLC

25 June 2008

STERLING ENERGY PLC

('Sterling' or the 'Company')

Korean National Oil Company Assigned 20% Interest in Sangaw North Block

Sterling (symbol: SEY) is an AiM listed independent oil & gas exploration and production company with interests in the Gulf of Mexico, Africa and the Middle East.

Sterling notes today's announcement by the Kurdistan Regional Government of Iraq ('KRG') that the Korean National Oil Company ('KNOC') has been nominated by the KRG to receive the Third Party Interest allocation of 20% in the Sangaw North Block.

Sterling entered into a Production Sharing Contract ('PSC') with the KRG in respect of the Sangaw North exploration Block, Kurdistan on 10 November 2007. As previously announced, Sterling's initial 100% interest in the PSC was subject to back-in rights for the KRG and a Third Party. Following the allocation of the Third Party interest to KNOC, Sterling's interest in the Block will be 80%.

Further details of the KRG announcement can be found on www.KRG.org

The Sangaw North Block

The Block, which covers an area of 492 sq kilometres, is located approximately 140 km south east of Erbil and 50 km south west of Suleimaniah. It lies in a highly prospective area around 50 km south east of the giant Kirkuk oil field and on trend with the major Taq Taq and Chemchemal oil and gas condensate discoveries. The Block itself contains a large surface anticline with multiple reservoir targets, in common with many existing fields in the area, providing strong encouragement for exploration success.