Sterling Exploration Director Resigns

- Sterling Exploration Director Resigns

Friday, July 29, 2011
Sterling Energy plc

Sterling announced that Andrew Grosse, Exploration Director, has resigned to pursue other opportunities. The terms of his employment with the Company contain provisions for a 6 month notice period.

The Company will start the process to seek and appoint a successor.

Angus MacAskill, Sterling's Chief Executive said, "On behalf of the Board and Shareholders, I would like to thank Andrew for his contribution during his time with Sterling, particularly during the very challenging operation to drill the Sangaw North well. We wish him well for the future."

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Sterling to Plug, Abandon Sangaw North Well

- Sterling to Plug, Abandon Sangaw North Well

Wednesday, July 06, 2011
Sterling Energy plc

Sterling provided the following update for the Sterling operated Sangaw North block in Kurdistan (53.33% working interest).

Flow testing operations have been completed in the cased hole section of the Sangaw North-1 well. Two flow tests were conducted; the first across a 100 meter interval within the Jurassic aged Sargelu formation and the second across a 100 meter interval within the Cretaceous aged Kometan formation.

During the first flow test, formation gas and water were observed in small quantities at surface but sustainable flow rates were not achieved. The Company believes that the Jurassic aged Sargelu formation does not contain a sufficient natural fracture network to support sustained flow.

During the second flow test, within the Cretaceous aged Kometan formation, the well flowed at a stabilized rate of approximately 0.4 million standard cubic feet of gas and 4,500 barrels of formation water per day during an 8 hour flow period through a 60/64ths inch choke with a wellhead pressure of 280 pounds per square inch. Approximately 83 percent of the produced gas was hydrocarbon gas with the remainder comprising 10 percent hydrogen sulphide and 7 percent carbon dioxide.

Neither flow test produced hydrocarbons at commercial rates and the Sangaw North-1 well will now be plugged and abandoned. The operations to plug and abandon the well are expected to take approximately 2 weeks, after which the drilling rig will be demobilized from the location.

The current exploration phase of the Production Sharing Contract for the Sangaw North area will expire in November 2011 and the joint venture partnership (Sterling, Addax and KNOC) may elect to enter the next exploration phase which runs until November 2013; the Sangaw North-1 well has fulfilled the work commitment for this next phase. During the coming months Sterling will integrate and analyse the seismic, drilling, logging and testing data before making recommendations to the joint venture group.

Angus MacAskill, Sterling's Chief Executive said, "We are disappointed that flow testing has not demonstrated commercial hydrocarbon flow rates in the Sangaw North-1 well. An integrated interpretation of all the data acquired during well operations will be conducted to determine the remaining potential of the Sangaw North structure prior to a decision on future operations."

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Sterling Disappointed with Sangaw North Results

- Sterling Disappointed with Sangaw North Results

Monday, June 13, 2011
Sterling Energy plc

Sterling provided the following update for the Sterling operated Sangaw North block in Kurdistan (53.33% working interest).

A flow test has been completed across the open hole section of the Sangaw North-1 well between 3,338 meters and 4,190 meters. This interval contains target horizons in the Jurassic Mus and Butmah formations and the Triassic Kurra Chine formation.

The well flowed at a stabilized rate of approximately 4.6 million standard cubic feet of gas and 7,280 barrels of formation water per day during a 12 hour flow period through a 1.5 inch choke with a wellhead pressure of 470 pounds per square inch.

Approximately 74 percent of the produced gas was hydrocarbon gas with the remainder comprising 24 percent hydrogen sulphide and 2 percent carbon dioxide.

A wireline logging operation was attempted to identify the contribution from individual zones within the open hole section but was unsuccessful due to mechanical restrictions within the flow testing equipment.

No further flow testing is planned in the open hole section of the well and this section is being isolated with cement plugs.

The joint venture partnership has elected, based on gas shows while drilling, to conduct two cased hole flow tests; the first across a 100 meter interval within the Jurassic aged Sargelu formation and the second across a 100 meter interval within the Cretaceous aged Kometan formation. Each flow test, including preparatory operations, is expected to take approximately three weeks to complete.

Angus MacAskill, Sterling's Chief Executive said, "We are disappointed that the open hole flow test has not demonstrated commercial hydrocarbon flow rates within the deeper horizons of the Sangaw North-1 well. The data acquired during this test will be integrated with all the other data acquired in well operations to determine the potential of these horizons. We look forward to the outcome of the two cased hole flow tests to be conducted in shallower formations."

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Sterling Reaches TD at Cladhan Appraisal Well

- Sterling Reaches TD at Cladhan Appraisal Well

Friday, June 03, 2011
Sterling Resources Ltd.
by SubseaIQ

Sterling announced the completion of drilling of the 210/30a-4X well on Block 210/30a in the United Kingdom North Sea. This is the fourth well (third side-track) drilled in the current four well campaign to further appraise the extent of the Cladhan reservoir.

The 210/30a-4X well was drilled in the most southern limit of the northern core area in a potentially separate channel, utilizing the Transocean Prospect rig. The objectives of the 210/30a-4X sidetrack well were to core the full reservoir section approximately one kilometer south and approximately 60 feet updip of the oil bearing 210/30a-4 well, and evaluate the southern fringe of the northern core area.

The 210/30a-4X well was drilled to a total measured depth (MD) of 10,614 feet encountering 171 feet gross, 105 feet net (vertical thickness) of high quality Upper Jurassic sands. Almost 180 feet of core was successfully recovered across the full reservoir section.

Petrophysical analysis of the interval showed five feet of oil-bearing sand at the top of the interval with an Oil-Down-To at 10,177 feet True Vertical Depth Subsea (TVDSS). An oil sample was obtained from the interval. A further 100 feet of water-bearing sand was encountered below thin shale which separates the top and bottom sands. A clear contact has not been observed although the top and bottom sands appear to be in pressure communication. The presence of a known Oil-Down-To bodes well for updip oil in other channels with the same pressure regime.

Generally, reservoir quality is very good with porosities up to 25 percent, substantiated by measurements obtained while taking fluid samples. These pressure measurements also confirm that the interval is over-pressured on trend with the 210/30a-4Y well, but some 900 psi lower than the discovery area. The implication of this information is that the southern fringe of the northern channel area is in communication with the central channel, being distinct from the main reservoir in the northern channel area. The well will be suspended for possible re-use as a future development well at this location or elsewhere after a sidetrack. With the completion of this four well drilling campaign, RPS Energy will start a review of the Cladhan resources with the intent of publishing an update report within a few weeks.

"Notwithstanding the presence of predominantly wet sands at this depth in this separate channel compartment, we are encouraged by the presence of oil in the top sand and by reservoir quality at this location. Further updip prospectivity is certainly promising," remarked John Rapach, Sterling's Chief Operating Officer. "We have proved that our current seismic model can adequately predict sand thickness but reservoir quality definition is now paramount for further appraisal and development drilling. Our next planned subsurface activity is to complete full reprocessing and interpretation of the existing seismic dataset incorporating all of the log, core, fluid and pressure results obtained during this current drilling campaign. Consequently, the next drilling campaign will probably commence in early 2012," noted Mr. Rapach.

"Our development planning is concentrating on either a subsea tie-back or FPSO development of the main northern core area with further definition of reserves and resources during our next drilling campaign. We are commencing pipeline route and environmental survey work within the next few weeks," added Mr. Rapach.

Mike Azancot, Sterling's Chief Executive Officer, commenting on these results noted, "The current exploration and appraisal drilling campaign on Cladhan has been successful in increasing the height of the oil column by 798 feet to 1228 feet in total. The extent of the development of the northern core area is now better defined with this increase in oil column. The fan area in the east of the field remains prospective as the results from the 210/30a-4Z well drilled in this campaign are not conclusive due to its proximity to a major fault. Our plan towards development with options for increased resource exploitation after further drilling is now underway with a target for first oil in 2014."

Sterling holds a 39.9% interest in license P1064 which contains Cladhan, and is the operator. The partners are Wintershall (UK North Sea) Ltd. with 33.5 percent, Encore Petroleum Ltd with 16.6 percent and Dyas UK Ltd with 10.0 percent.

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Sterling Reaches TD at Sangaw North Well

- Sterling Reaches TD at Sangaw North Well

Tuesday, May 24, 2011
Sterling Energy plc

Sterling provided the following update for the Sterling operated Sangaw North block in Kurdistan (53.33% working interest).

The Sangaw North-1 well has been drilled to a total depth of 4,190 meters, within the Triassic Kurra Chine formation. Wireline logs have been run across the open hole section and are currently being interpreted.

The joint-venture partnership has elected, based on gas shows while drilling, to conduct a flow test across the open hole section. The flow test, including preparatory operations, is expected to take approximately three weeks to complete. Further flow testing may be undertaken depending on the results of the first flow test and interpretation of the drilling and petrophysical data acquired in the well.

Angus MacAskill, Sterling's Chief Executive said, "We are pleased to have reached the planned well depth in this very challenging drilling environment and look forward to the outcome from the ongoing program of data acquisition."

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Sterling Reaches TD at Cladhan Appraisal

- Sterling Reaches TD at Cladhan Appraisal

Wednesday, May 18, 2011
EnCore Oil plc
by SubseaIQ

EnCore announced that the Cladhan appraisal well 210/30a-4y, the third well of a four well program located in UK North Sea Blocks 210/29a & 210/30a has reached Total Measured Depth of 12,615 feet.

The well was drilled as a side-track into the Central Channel prospect which lies to the south of the current Cladhan discovery. The well encountered two Upper Jurassic reservoir sand sequences with a gross true vertical thickness (TVT) of 191 feet and a net of 40 feet TVT. Log and pressure data indicates the sands are water wet. It would appear from the pressure data that the sands in the Central Channel area, although over pressured, are in a separate pressure regime from the main Cladhan accumulation.

The Group will now drill the final side-track of this drilling phase, approximately 150 feet up dip of the previous oil bearing 210/30a-4 well, with the objective of gaining further information on the southern sector of the Northern Channel area where the original Cladhan discoveries have been made. It is expected that this side-track will take approximately 15-20 days, subject to operational and weather requirements.

Commenting on the latest well result, Alan Booth, EnCore's Chief Executive Officer said, "This result has provided important information in outlining the extent of the overall Cladhan play within the license. Although the over pressured nature of the reservoir suggests there may be remaining prospectivity up dip from the current Central Channel well, this would likely need to be the subject of a future drilling campaign. This well and the previous 210/30a-4z deep well in the Fan area have not impacted on the established Cladhan discovery. However, the results start to limit the upside potential on the license as a whole, and suggest that the Cladhan field is likely confined to the Northern Channel belt area and an area up dip of the deep fan well.

"The Group intends to carry out an infield survey and a pipeline survey to determine the best development options for the Cladhan discovery."

The equity in the Cladhan joint venture partnership is as follows: EnCore Oil plc (16.6 percent.), Sterling Resources Ltd (39.9 perent., Operator), Wintershall (UK North Sea) Limited (33.5 per cent.) and Dyas (10 percent.).

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Sterling Drills First Side-track in Cladhan Campaign

Sterling Drills First Side-track in Cladhan Campaign

Thursday, May 05, 2011
Sterling Resources Ltd.

Sterling Resources Ltd. on Thursday announced the completion of drilling of the 210/30a-4Z well on Block 210/30a in the United Kingdom North Sea. This is the second well (first side-track) drilled in the current four well campaign to appraise further the extent of the Cladhan reservoir.

The 210/30a-4Z well was drilled at a location 1.6 kilometers east and a further 1240 feet downdip of the most recent 210/30a-4 well, utilizing the Transocean Prospect rig from a centrally positioned location. The objectives of the 210/30a-4Z sidetrack well were to appraise the field further east of previous well control and prove sand and oil presence in a fan system considerably deeper than previous wells which have been drilled into channel systems on a terrace structure.

The 210/30a-4Z well was drilled to a total measured depth (MD) of 15,900 feet having encountered two separate Upper Jurassic reservoir zones of 12 and 169 feet (vertical thickness) with oil shows through both intervals. No oil-water contact was encountered. Petrophysical analysis of the open-hole logs showed porosities up to 13.5% but with a high degree of dolomitic cement. Pressure measurements were attempted but not obtained.

"We have been able to prove-up a large depositional feature as prognosed from our seismic interpretation and with hydrocarbons quite deep in the structure," remarked John Rapach, Sterling's Chief Operating Officer. "Our challenge will be to understand the variation in reservoir quality in the eastern area of the field. We are only half way through our current campaign of drilling; the next well will target the central channel and the final well will be drilled to the southern portion of northern channel. These wells are planned into areas with similar seismic characteristics that have already encountered movable hydrocarbons. Success with these wells will build on our resource base inventory and provide further information for our ongoing development planning," added Mr. Rapach.

"While we would have preferred to see better quality sands in what appears to be a large package of oil filled reservoir, this is the first well into a deeper portion of the field and we have to remember that we are still exploring in an area with little well control," stated Mike Azancot, Sterling's President and CEO. "As is usually the case in the early phase of field appraisal, a number of wells are required to delineate the field. The partnership is planning reprocessing of current seismic data along with possible further seismic acquisition, which should improve understanding of reservoir quality variation. We still see much promise in this eastern fan area and we will be updating the geological model potentially to unlock significant prospectivity. Given that the first two wells of the current campaign have still not encountered an oil-water contact, the uncertainty of the prospective oil in place at least in the terrace area has been significantly reduced and should be further refined by the next two wells," added Mr. Azancot.

On completion of this appraisal campaign and following analysis of all data obtained, the partnership intends to commission an updated independent resource evaluation.

Sterling holds a 39.9% interest in license P1064 which contains Cladhan, and is the operator. The partners are Wintershall (UK North Sea) Ltd 33.5 percent, Encore Petroleum Ltd 16.6 percent and Dyas UK Ltd 10.0 percent.

Sterling Resources Ltd. is a Canadian-listed international oil and gas company headquartered in Calgary, Alberta with assets in the United Kingdom, Romania, France and the Netherlands.

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Sterling Declares Force Majeure at Black Sea Blocks

Sterling Declares Force Majeure at Black Sea Blocks

Thursday, April 28, 2011
Sterling Resources Ltd.

Sterling Resources has declared Force Majeure on its Midia and Pelican Blocks in the Black Sea after the Company has been unable to undertake Petroleum operations for reasons outside of its control.

In early 2011, after extensive and lengthy efforts, the Company finally obtained from the relevant Governmental authorities the environmental and drilling permits necessary for operations on the Midia and Pelican Blocks. The National Agency of Mineral Resources ("NAMR") has given approval to a 2011 work program based on which Sterling is obligated to undertake certain offshore activities which include the drilling of 2 offshore wells, acquiring 1,050 linear kilometers of 2D seismic and undertaking investigations and studies to bring the Ana and Doina discoveries forward for development.

However, in July 2009 the Romanian Parliament passed a law requiring construction permits for certain offshore activities. Sterling has sought clarification of this requirement from relevant authorities, as the activities contemplated under the 2011 work program clearly appear to have aspects that will require a construction permit. It is Sterling's view that, after having received responses from certain relevant governmental authorities, that the authorities are currently unable or unwilling to provide construction permits for offshore oil and gas activities.

The effect of this situation, which the Company views as political in nature, is to render it impossible for the Company to undertake Petroleum Operations at the present time. Sterling has thus issued a notice to NAMR, stating that the total lack of clarity on the applicable procedure and authority for issuance of construction permits constitutes an event of Force Majeure under the Concession Agreement.

Under the terms of the Concession Agreement NAMR must, within 15 days of this notification, either agree with the invocation of Force Majeure, the effect of which would be to extend the duration of the Concession Agreement, or reject the Company's invocation putting the two parties into a dispute resolution procedure which could ultimately be decided in international arbitration.

Mike Azancot, Sterling's Chief Executive Officer, said, "Despite this unfortunate situation we look forward to working with the NAMR and other Romanian authorities to find a resolution that will allow the Company to fulfill its obligations, preserve its rights and ultimately achieve success for the Company and the people of Romania. With a satisfactory resolution achieved, we are hopeful that we can advance our plans to undertake further exploration on these very prospective blocks and bring Ana and Doina to production within 3 years. This will bring significant benefits to Romania in terms of greater energy self-sufficiency, the likely award of construction and oil service contracts to local companies, and encouraging a wide range of companies to explore offshore Romania."

Sterling to Drill Ahead at Sangaw North Block

Sterling to Drill Ahead at Sangaw North Block

Friday, March 25, 2011

Sterling Energy plc

 

Sterling provideed the following update for the Sterling operated Sangaw North block in Kurdistan (53.33% working interest).

Sangaw North #1 Well

The side-tracked wellbore of Sangaw North #1 well has been drilled to a depth of 3,360 metres, into the top of the Jurassic formations and at a depth above where the influx of gas was recorded in the previous wellbore.

A liner has been run and cemented across the open hole interval with the liner shoe at approximately 3,340 meters.

The Company now plans to drill ahead and evaluate the Jurassic formations to a well depth of 3,660 meters and estimates this will take approximately one month. During this section, the well is expected to encounter the formations from which gas containing hydrocarbons and hydrogen sulphide entered the well in the previous wellbore. Operations are being conducted using drill pipe resistant to the effects of hydrogen sulphide.

The joint venture partners in the Sangaw North Production Sharing Contract ("PSC") may elect, in the event of encouraging results, to drill further to evaluate deeper Jurassic and Triassic formations.

Petrophysical logs have been acquired across open-hole Cretaceous intervals below 2,400 meters, the base of the intervals logged and flow tested in the previous wellbore. Preliminary evaluation of the logs acquired in the current wellbore, together with hydrocarbon shows and other information acquired while drilling, indicate the presence of hydrocarbons within these deeper Cretaceous intervals. A detailed analysis of all the data acquired is being undertaken to identify whether flow testing of certain intervals may be warranted. Flow testing of Cretaceous intervals, if undertaken, will follow any flow testing that may be undertaken in the Jurassic and Triassic intervals after they have been drilled.

Extension of Exploration Period

Sterling has received confirmation from the Ministry of Natural Resources of the Kurdistan Regional Government that the first sub-period of the exploration phase of the PSC has been extended by one year to allow for the completion of drilling operations in the Sangaw North #1 well and the evaluation of the results of this well. The first sub-period, including the one year extension, will now continue until November 2011.

Angus MacAskill, Sterling's Chief Executive said, "Operations since the gas influx and parted drill pipe in the previous wellbore have been challenging, and we are very pleased to have successfully re-drilled and cased the well to this important point in the upper Jurassic section. From here, we look forward to exploring the potential of the deeper horizons."