Sterling Resources Divests, Near Term Focus on Romania

Sterling Resources Ltd. has undertaken a number of steps, including the divestment of an interest in the Cladhan area, as its focuses on an active exploration program in the remainder of 2012.

Stering has entered into an agreement with TAQA Bratani Limited (“TAQA”) for the sale of a 13.5 percent interest in the North Cladhan area (Blocks 210/29a and 210/30a) for an initial consideration of US$47 million, including an allocation to tax allowances with the opportunity for additional contingent consideration based on  a proven plus probable reserves calculation.  On completion of this transaction, which is subject to necessary third party approvals, the new equity positions will be Sterling Resources (UK) Ltd 26.4 percent, TAQA 40.1 percent and Wintershall (UK North Sea) Limited 33.5 percent.

TAQA will also earn a 12.5 percent interest in Blocks 210/29c and 210/30b through a farm-in agreement as a result of which TAQA will fund Sterling’s remaining equity interest in the recently drilled well 210/29c-5 on the South Cladhan prospect. On completion of the farm-in agreement, which is subject to regulatory approvals, the new equity positions in South Cladhan will be as follows: Sterling Resources (UK) Ltd 12.5 percent, TAQA 12.5 percent, Wintershall (UK North Sea) Limited 25 percent, Valiant Exploration Ltd 30 percent and Agora Oil and Gas UK 20 percent.

Sterling also to announced that it has reached agreement with the group of banks providing the reserve based loan for Phase 1 of the Breagh development for a reduction in the minimum group cash level required over the 12 month look-ahead period from £35 million to £20 million. The difference, £15 million (US$24 million) is therefore available for general corporate purposes.

Commenting on these announcements, Mike Azancot, Sterling’s President and CEO said, “As a result of the arrangements announced today, Sterling will have funds to conduct an active exploration program in the remainder of 2012 including drilling two exploration wells (on the Ioana and Eugenia prospects offshore Romania) and acquiring seismic on the Midia and Muridava Blocks offshore Romania, as well as acquiring seismic offshore UK and the Netherlands.”