Sterling Refocuses After Loss

UK-listed Sterling Energy said April 25 it made a $5mn loss after tax in first quarter 2016, due largely to a $3.5mn full impairment of its C-3 shallow water licence offshore Mauritania. Its loss in 1Q 2015 was only $815,000.

It has assigned its 40.5% interest in block C-3 to Tullow Oil, at zero cost to Tullow Oil. Work obligations for the block have been completed, so Sterling will incur no extra costs on the withdrawal, completed on March 16 2016. It had zero debt and cash of $95.2mn as at March 31, but faces costs and “looming” challenges at the Chinguetti oilfield offshore Mauritania, likely to be decommissioned soon because of faltering production levels.

The company is now focusing its efforts on the Tullow-operated C-10 exploration block, also offshore Mauritania, where it has a 13.5% interest, which is close to recent major gas and oil finds.

Sterling also retains a 50% operating interest in the 17,650km² Ambilobe block offshore Madagascar which it is hoping to extend beyond July 2016, a 40% interest in a third-party-operated onshore block in Somaliland in east Africa, and a 100% stake in the disputed Ntem licence offshore Cameroon.

Mark Smedley