 | | | Published : March 26th, 2015 | Annual Results for the year ended 31 December 2014 |
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| Annual Results for the year ended 31 December 2014 | |
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26 March 2015
STERLING ENERGY PLC
ANNUAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2014
Sterling Energy Plc is today issuing its preliminary results for the year ended 31 December 2014.
OVERVIEW
Sterling Energy plc (the 'Company'), together with its subsidiary undertakings (the 'Group'), is an upstream oil and gas company listed on the AIM market of the London Stock Exchange. The Company is an experienced operator of international licences with a focus on projects in Africa. The Group has high potential exploration projects in Cameroon, Somaliland, Madagascar and Mauritania together with a production interest in Mauritania.
2014 SUMMARY
· In Cameroon, the Bamboo-1 exploration well was drilled on the Ntem block; no commercial hydrocarbons were encountered and the well was subsequently plugged and abandoned in April 2014. The Group's share of the drilling cost was funded by Murphy under the 2011 farm- out agreement.
· 3D Seismic Programme on the Ambilobe block, offshore Madagascar, is expected to be completed in Q2 2015.
· Acquisition of a 40% carried interest in the Odewayne block, Somaliland, was completed in Q2 2014.
· Signature of an agreement with Tullow Oil to acquire a 40.5% interest in PSC C-3, offshore Mauritania.
· The Group received $6.9 million of net cash flow from Chinguetti field operations, offshore Mauritania in 2014 (2013: $11.2 million).
· Cash resources at 31 December 2014 of $108.1 million (2013: $120.8 million).
· The Group remains debt free.
For further information contact:
Sterling Energy plc +44 (0) 20 7405 4133
Eskil Jersing, Chief Executive Officer
Alastair Beardsall, Chairman
Peel Hunt LLP +44 20 7418 8900
Richard Crichton
www.sterlingenergyplc.com Ticker Symbol: SEY
CHAIRMAN'S STATEMENT
During 2014 we focused on the exploration of our existing assets and building our portfolio with the addition of new and diverse opportunities, spreading our resources, both human and financial, across varying technical, commercial and geopolitical ventures.
We have made progress in our quest for new ventures in a rapidly changing oil and gas industry landscape. At the beginning of 2014, the Company and many of our peers all actively sought new portfolio opportunities. As the global oil price started to decline the competitive market for new ventures started to ease in parallel with some additional opportunities being offered by companies with exploration commitments but whose budgets were under pressure in response to the falling oil price. We have also seen the traditional business model of the smaller E&P companies securing acreage, and then undertaking leveraged farm-outs to reduce their exposure to the high costs of exploration, coming under commercial and financial strain as the medium and larger independent oil companies are no longer willing to fund 100% of the exploration risk. We had adapted our Group strategy accordingly and, in particular are more cautious about our ability to farm-out what are sometimes, very large financial commitments.
We believe the key to long term exploration success is to be diligent during the appraisal of new ventures and highly selective in the final choice, securing fewer high quality opportunities rather than over-stretching the Company's resources with smaller equity spread across more higher risk ventures.
In May 2014 we completed the acquisition of 40% of the Odewayne PSC onshore Somaliland. Genel, the operator, carries us for our share of costs to acquire a 1,500km 2D seismic programme and to drill one exploration well; by acquiring an uncapped carried interest we can forecast with certainty our exploration costs for a pre-defined work programme.
In February 2015 we signed an agreement with Tullow Oil to acquire a 40.5% interest in PSC C-3 offshore, shallow water Mauritania. As operator, Tullow had just finished the acquisition of a 1,600km 2D seismic programme. During the next few months we shall work with Tullow to integrate the new seismic data with the existing sub-surface data-set to mature leads to drill-ready prospects ahead of the decision to enter the next exploration period with a commitment to drill one exploration well.
In January 2014, the Company's wholly owned subsidiary, Sterling Cameroon Limited, and our joint venture partner, lifted force majeure in the Ntem block, in Cameroon, to allow exploration activities to resume. The Ocean Confidence rig commenced the drilling of Bamboo-1 exploration well in February 2014. The well encountered the reservoirs that had been identified from the extensive 3D seismic dataset but no commercial hydrocarbons were encountered; the well was plugged and abandoned in April 2014. A review of the remaining prospectivity has highlighted a drill-ready prospect located in Cameroon maritime waters which are also claimed by Equatorial Guinea. We believe the geopolitical risk involved in drilling in these disputed waters is too great and in May 2014 force majeure was declared again. Société Nationale des Hydrocarbures ('SNH'), the national oil company of Cameroon, has advised Sterling Cameroon Limited that "Cameroon does not recognise that any situation of force majeure exists in the Ntem Permit". We are in discussions with SNH to agree the best way to progress the exploration activity in the Ntem block.
In February 2015 Murphy advised Sterling Cameroon Limited and SNH that Murphy proposes to transfer its 50% interest and operatorship to Sterling Cameroon Limited subject to receipt of Cameroon government approvals. We would like to thank Murphy for their diligent work as operator of the Ntem concession and their financial contribution that covered the Group's share of all exploration costs since November 2011.
In Madagascar we received Presidential consent to extend Phase 2 and 3 of the Ambilobe and Ampasindava PSCs, respectively, to July 2016.
The Company's wholly owned subsidiary, Sterling Energy (UK) Limited, and ExxonMobil, our joint venture partner in the Ampasindava PSC, have completed a review of the Sifaka prospect and concluded that the technical and commercial risks are too great to justify an exploration well; furthermore no other drill ready prospects have been identified. The joint venture partners are in discussions with OMNIS, the Malagasy petroleum agency on the future work programme.
Sterling Energy (UK) Limited, as operator, expects to complete in Q2 2015 the acquisition of 1,250 km² of 3D seismic data over the Ambilobe block in Madagascar, the cost of which is being paid by Pura Vida who farmed into 50% of the Ambilobe PSC in December 2013. We look forward to acquiring and interpreting this data to identify possible prospects ahead of the 'drill or drop' decision in July 2016.To continue reading this noodl, please get the original version here. |
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Sterling Energy Plc
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CODE : SEY.L |
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ISIN : GB00B4X3Q493 |
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Sterling Energy is a and oil producing company based in United kingdom. Sterling Energy is listed in Germany, in United Kingdom and in United States of America. Its market capitalisation is GBX 3.2 billions as of today (US$ 3.8 billions, € 3.3 billions). Its stock quote reached its lowest recent point on March 20, 2009 at GBX 0.80, and its highest recent level on October 08, 2021 at GBX 14.55. Sterling Energy has 220 053 020 shares outstanding. |
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