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







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