EAT THIS BASHERS...: Sterling Resources announcesCALGARY, July 25, 2011 /CNW/ - Sterling Resources Ltd. (TSXV: SLG)("Sterling" or the "Company") is pleased to announce that the FieldDevelopment Plan ("FDP") for the Breagh gas field has received theunconditional approval of the UK Department of Energy and ClimateChange ("DECC").
FDP approval from DECC was formally granted at a ceremony that tookplace at RWE Dea UK's London office earlier today, which was attendedby Charles Hendry MP, UK Minister of State for Energy, as well asrepresentatives of both Sterling and RWE Dea UK. RWE Dea UK isoperator of the Breagh field holding a 70 percent working interest,with Sterling holding the remaining 30 percent. The Breagh field is oneof the largest natural gas discoveries to be developed in the UKSouthern North Sea in recent years. The gas field is a conventionalCarboniferous reservoir and will be the first large scale productionfor Sterling.
"The approval of the FDP for the Breagh field is a major milestone forSterling as we move from a pure exploration and appraisal company intoa full cycle E&P organization," noted Mike Azancot, Sterling's CEO."Sterling has been at the forefront of the project as operator of thePromote licenses awarded in 2004 and 2005 culminating in a majorexploratory drilling campaign in 2007. We have maintained our belief inthe value of the assets with a determination to develop the field withthe current operator RWE Dea UK. Now, with initial gas production onlyabout a year away, Breagh will be a cornerstone to our future growthplans," added Mr. Azancot.
With the receipt of the FDP approval and the finalization of the debtfacility announced last week the Breagh project is moving towardscompletion. Around 100 kilometres of 20 inch pipeline has beensuccessfully installed offshore and the platform is due forinstallation in early September. The platform was constructed byHeerema Vlissingen in the Netherlands and consists of a jacketapproximately 85 metres tall with a total weight of some 4,000 tonnesand topsides of approximately 1,400 tonnes. The platform will beinstalled by Heerema Marine Contractors.
Energy Minister Charles Hendry said, "This is welcome news, Breagh isone of the largest natural gas discoveries in the Southern North Sea inrecent years, and developments like this play a vital role in ensuringwe have secure energy supplies throughout the UK. It is alsoencouraging to see the success of initiatives such as the Promotelicense, developed through PILOT, which originally allowed SterlingResources to gain access to this acreage and bring the developmentforward under the partnership and operatorship of RWE."
The Breagh field is located in UKCS blocks 42/12a and 42/13a of theSouthern North Sea in 62 metres water depth, approximately 100kilometres east of Teesside. The field is being developed in twophases. Phase 1 entails gas to be exported via the 20 inch pipelinefrom the Breagh Alpha platform to Coatham Sands, Redcar on the UKmainland, and a 10 kilometre onshore pipeline for processing at theTeesside Gas Processing Plant (TGPP) at Seal Sands. The TGPP site isowned by Teesside Gas & Liquids Processing, and after processing at theTGPP, the gas will enter the UK National Transmission System. Phase 2,if approved, is currently expected to include additional wells in theeast of the field drilled from a Breagh Bravo platform tied back toAlpha. The current estimate for capital expenditures for Phase 1,assuming Phase 2 follows on, remains at around £420 million (for 100percent of the field) although there remains some scope for minorvariances in the final level of expenditures. The FDP capitalexpenditure estimate for Phase 1 if a second platform is not installedis £485 million which includes £65 million for drilling threeadditional long reach wells out to the east during 2013-14 from BreaghAlpha platform.
Sterling Resources Ltd. is a Canadian-listed international oil and gascompany headquartered in Calgary, Alberta with assets in the UnitedKingdom, Romania, France and the Netherlands. The shares are listed andposted for trading on the TSX Venture Exchange under the symbol "SLG".
Neither the TSX Venture Exchange nor its Regulation Services Provider(as that term is defined in policies of the TSX Venture Exchange)accepts responsibility for the adequacy or accuracy of this release.
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Forward-Looking Statements
All statements included in this press release that address activities,events or developments that Sterling expects, believes or anticipateswill or may occur in the future are forward-looking statements.Specific forward-looking statements in this press release includestatements regarding expected capital expenditures for Phase 1 andPhase 2 and expectations regarding Phase 2 development. In addition,statements relating to reserves or resources are deemed to beforward-looking statements as they involve the implied assessment,based on certain estimates and assumptions that the reserves andresources described can be profitably produced in the future.
These forward-looking statements involve numerous assumptions made bySterling based on its experience, perception of historical trends,current conditions, expected future developments and other factors itbelieves are appropriate in the circumstances. In addition, thesestatements involve substantial known and unknown risks anduncertainties that contribute to the possibility that the predictions,forecasts, projections and other-forward looking statements will proveinaccurate, certain of which are beyond Sterling's control, including:the impact of general economic conditions in the areas in whichSterling operates, civil unrest, industry conditions, changes in lawsand regulations including the adoption of new environmental laws andregulations and changes in how they are interpreted and enforced,increased competition, the lack of availability of qualified personnelor management, fluctuations in commodity prices, foreign exchange orinterest rates, stock market volatility and obtaining requiredapprovals of regulatory authorities. In addition there are risks anduncertainties associated with oil and gas operations. Readers shouldalso carefully consider the matters discussed under the heading "RiskFactors" in the Company's Annual Information Form.
Undue reliance should not be placed on these forward-looking statements,as there can be no assurance that the plans, intentions or expectationsupon which they are based will occur. Sterling's actual results,performance or achievements could differ materially from thoseexpressed in, or implied by, these forward-looking statements. Thesestatements speak only as of the date of the press release. Sterlingdoes not intend and does not assume any obligation to update theseforward-looking statements except as required by law.
Financial outlook information contained in this press release aboutprospective results of operations, financial position or cash flows isbased on assumptions about future events, including economic conditionsand proposed courses of action, based on management's assessment of therelevant information currently available. Readers are cautioned thatsuch financial outlook information contained in this press releaseshould not be used for purpose other than for which it is disclosedherein.