Acquisition

Sterling Energy PLC
30 January 2004


                   Production Acquisition in Gulf of Mexico

January 30, 2004: Sterling Energy plc has agreed to acquire five producing gas
fields from Osprey Petroleum Partners, LP offshore Texas in the Gulf of Mexico.

The acquisition will increase Sterling's current gas production by over 6
million cubic feet of gas equivalent per day (mmcfed), and will more than double
its US proven and probable reserves. It also includes a gas gathering system
with shore facilities.

Following the transaction, Sterling will become an operator for the first time
in the Gulf of Mexico.

A conditional agreement, details of which remain subject to confidentiality
until closing, has been signed and a $1 million deposit paid. The deal is
expected to be completed on 26th February and is subject to the normal
pre-conditions of such an acquisition. Sterling intends to fund the acquisition
with a combination of bank loan and group cash resources. The bank facility is
subject to a due diligence review.

The new fields are located near-shore in shallow water, close to Sterling's
existing production assets. The additional production and income from the
gathering system are expected to produce net revenues (after operating costs) of
around $1 million per month at current gas prices of just below $6 per thousand
cubic feet

There are also substantial additional undeveloped and behind pipe proven
reserves which Sterling intends to bring on to production through a drilling and
work-over programme.

Further details of the acquisition will be given following completion.





For further information contact:


Harry Wilson, Chief Executive, Sterling Energy plc:        01582 462 121

Nigel Quinton, Operations Director, Sterling Energy plc:   01582 462 121

Allan Piper, First City Financial Public Relations:        020 7436 7486
                                                           07736 064 982

Rob Collins, Evolution Beeson Gregory:                     020 7071 4311



www.sterlingenergyplc.com                                  Ticker Symbol: SEY


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