West Africa Agreement

Sterling Energy PLC
18 March 2005



               Sterling Energy plc ('Sterling' or the 'Company')

          West Africa Deal to Fund Study into Major Heavy Oil Deposit



Sterling has signed a farm-out deal with Markmore Energy (L) Ltd, a private oil
and gas company wholly owned by investor Tan Sri Halim Saad for the Dome Flore
offshore petroleum license held by Sterling.


The Dome Flore block is located in West Africa, offshore Senegal and Guinea
Bissau, in the area administered by the Agence de Gestion et de Cooperation
(AGC).  The deal is subject to the final approval of the High Authority of AGC.
The Dome Flore block contains an estimated 800 million barrels of heavy oil in
place.  Thirteen wells have been drilled into the block, and several have
penetrated 10-13 API heavy oil deposits, with thickness of 20-35 metres, in
shallow Oligocene reservoirs.  Additionally, two wells have found much smaller
deposits of 30-35 API light oil.  The discoveries lie in 50 metres of water,
approximately 70 km offshore.


Under the terms of the deal with Sterling, Markmore will take over the
operatorship of the licence and pay for a feasibility study into a major heavy
oil project, a study of new exploration prospects, the cost of a possible
exploration well with an additional bonus on exploration success, and a small
initial signature payment.   After the deal is completed, Markmore will own 55%
of the block, Sterling 30% and l'Entreprise AGC (a government-owned company)
will own 15%.


Markmore Energy will employ expert Canadian engineering firms to conduct a
year-long engineering study to assess heavy oil development economics and
options at Dome Flore.  In particular, the study will examine the possible
application of Canadian steam assisted gravity drainage (SAGD) technology in the
offshore reservoir.  Additionally, Markmore will study new exploration prospects
in the block in 2005, and could drill a new exploration well in 2006 / 2007.


SAGD technology has achieved recovery rates above 40% in heavy oil operations in
Canadian tar sands.  The technology uses two parallel horizontal wells.  Steam
is injected in the top well, where it rises and warms the heavy oil, allowing it
to flow.  The bottom well drains the condensed steam and hot oil, where it is
pumped to the surface and separated.


Sterling Chief Executive Harry Wilson said: 'This is an excellent deal for
Sterling, with a partner that has a strong interest in maximising the potential
of this promising acreage. Moreover, without incurring any costs, we benefit
from a residual 30% interest in the significant potential of this permit.'


Mr Wilson added: 'With current oil prices and recent advances in technology,
heavy oil deposits such as in Dome Flore start to look very interesting
commercially.'


The initial Dome Flore permit period expires next January but can be extended
for two years subject to commitment to drill an exploration well.


Markmore Energy (L) Ltd is a private oil and gas company wholly owned by
Malaysian investor Tan Sri Halim Saad. Halim's other business interests include
Metro Ikram Sdn. Bhd., a wholly owned investment company, whose activities
include a current project for construction of 70,000 units and 100,000 units of
affordable housing in Senegal and Ghana, respectively. He also has a substantial
share in Seloga Holdings Bhd, a company listed on Bursa Malaysia, which is
building an asphalt manufacturing plant in Malaysia.






For further information contact:

Harry Wilson, Chief Executive, Sterling Energy plc:       01582 462 121
Allan Piper, First City Financial Public Relations:       020 7436 7486
                                                          07736 064 982

Henry Turcan, Evolution Securities Ltd:                   020 7071 4324






                      This information is provided by RNS
            The company news service from the London Stock Exchange