Production set for 45% rise

Sterling Energy PLC
01 August 2003

Sterling Energy plc is pleased to announce the completion of two new wells on
key developments in the Gulf of Mexico. Gas from the two projects is expected on
stream before the end of the summer, boosting the company's production by around
45%.

On the Eugene Island 268 lease offshore Louisiana, where Sterling purchased a
60% interest last April, the company has tested gas flows of 5 million cubic
feet per day (mmcfd) following the successful completion of the first production
well.

Further west, offshore Texas, the company has also completed a new side-track
well on the El Gordo field, tapping into four separate gas bearing zones at
successively deeper horizons.

Sterling Chief Executive Harry Wilson said: 'We can now look forward to a
significant uplift in our monthly cash flow, and anticipate that daily
production will increase by around 45% by the end of the summer. The rapid and
efficient completion of these two projects again underscores our approach in the
Gulf of Mexico, where we believe we can add significant value at low cost.'

Sterling has followed a strategy of acquiring proven reserves in fields
overlooked by previous owners, using its technical and commercial expertise to
unlock upside potential. Sterling's recent Gulf of Mexico gas production has
been around 4.4 mmcfd, and in June the company announced cash flow from
production of $700,000 per month.

Completion of drilling at El Gordo was hampered by Hurricane Claudette, but
tests have now begun on the lowest of the four gas bearing zones where initial
production rates were lower than expected. Various options are currently being
evaluated in order to achieve a higher rate of production from this zone.

At Eugene Island, the production work has involved completion of a new pipeline
ready for hook-up in mid-August. Total costs of the project to Sterling are
estimated at around $4.2 million. At current gas prices, the project should
achieve payback within two years.

For further information contact:

Harry Wilson, CEO, Sterling Energy plc:                    01582 462 121
Graeme Thomson, Finance Director, Sterling Energy plc:     01582 462 121
Allan Piper, First City Financial Public Relations:        020 7436 7486
                                                           07050 203 304
Chris Callaway, Evolution Beeson Gregory:                  020 7071 4309



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