AGM Statement

Sterling Energy PLC
15 June 2006


15 JUNE 2006


                                  STERLING ENERGY PLC
                             ('Sterling' or the 'Company')



                              2006 ANNUAL GENERAL MEETING



                              'MAJOR PROGRESS IN 2006'



At today's Annual General Meeting, Mr. Richard O'Toole, Chairman of Sterling,
made the following statement:


'2005 was another successful year for Sterling. Financial and operating
performance improved. Turnover was up by 19% at £13.6 million. Pre-tax profits
rose 20% to a record £5.0 million and cash inflow (before one-off closure costs
and working capital movements) increased 13% to £8.8 million. We invested a
further $65 million in the Chinguetti development and expect to have invested a
further $50 million during this year, a substantial investment for Sterling.



With Sterling's first oil sales from the Chinguetti Field in April 2006, there
has been a marked increase in cash flow. Our first two cargoes realised a total
of over $21 million, before operating costs and taxation. A third cargo has
recently been lifted. In addition, we have the cash flow from our royalty
interest and from the USA.



The commencement of the Chinguetti Field development on-time, has been a
significant success for all the parties involved. It has been pleasing to see
the recent amicable resolution to the issues raised by the Mauritanian
Government in relation to PSC's A and B.  The technical and operational issues
that have arisen on the Field since first oil are being addressed by the
operator. Based on current information, we remain confident that the project
will meet our projected financial returns.  The outcome also bodes well for
other expected development decisions in 2006 on the Tevet and Tiof discoveries,
as well as for our carried interest in the exploration programme, which is
expected to recommence shortly.



Our drilling activity in the Gulf of Mexico has resulted in an increase in
production from an average of 7.8 mmcfged in the first quarter to its recent
levels of 9.5-10.0 mmcfged. Sterling has committed to a further four exploration
wells in the second half, including 3 onshore. These could materially impact on
production and reserves.



We were delighted to become the first British company to sign an MOU with the
Kurdistan Regional Government of Iraq.  Field studies continue, a local office
is being opened and a country manager will be appointed. Recent developments
give cause for increasing optimism.




In addition to the US and Mauritanian activity, a largely carried exploration
programme of up to 3 wells in Africa is expected over the next year, together
with interpretation of the 4,000 km of recently acquired 2-D seismic, offshore
Madagascar. New projects are being actively sought.



With oil prices remaining around $65/bbl and with the increased cash flow from
our investment programme, a key objective is an expansion of the upside
potential of the asset base. New licences, exploration, development and
production activity will target higher impact opportunities. Whilst we will not
overpay for deals or opportunities, your Board continues to assess the many new
opportunities for growth.



There has been major progress so far in 2006 and your Board remains confident
that this will be a year of further development for Sterling.'



All resolutions proposed at the AGM were duly passed and Dr E Butler has, as
previously announced, today stepped down as a director.


Enquiries

Sterling Energy (01582 462 121)          Web site: www.sterlingenergyplc.com
Harry Wilson
Graeme Thomson

Citigate Dewe Rogerson (020 7638 9571)
Media enquiries: Martin Jackson
Analyst enquiries: Nina Soon

Evolution Securities (020 7071 4300)
Rob Collins
Henry Turcan




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