Sterling Resources: Breagh A05 Output Rate Lower than Expected (UK)

Sterling Resources Ltd. announces production test results for recently completed Breagh development wells A04 and A05 and resultant revised 2013 production guidance.

A05 is now completed, having reached a total depth of 12,810 feet measured depth at a location 2.5 kilometres north east of the Breagh Alpha platform. The well has been tested at a maximum rate of 21 million standard cubic feet per day (“MMscf/d”). Following the testing of the A05 well, the A04 well which was drilled, completed and suspended in February 2013, was tested and produced at a maximum rate of 26 MMscf/d. The wells are anticipated to provide a combined initial production capacity of some 45 MMscf/d under expected production conditions.

Initial gross production at Breagh is expected to be approximately 135 MMscf/d with five of the seven planned production wells on-stream. The average production rate for the field is now forecast to be circa 102 MMscf/d (31 MMscf/d net to Sterling) for the remainder of 2013, assuming first gas production in mid-September. This estimate reflects appropriate field uptime assumptions following production start-up of the wells and the processing plant, and compares to the previous forecast of May 21st 2013 of 170 MMscf/d (51 MMscf/d net to Sterling), which assumed an early August production start.

Total average production during 2014 at Breagh is now estimated to be 112 MMscf/d (33 MMscf/d net to Sterling). This compares to the previous forecast average production rate of 146 MMscf/d (44 MMscf/d net to Sterling).

“We are pleased to be able to put another two development wells into service with a combined total of 45 MMscf/d of production,” stated John Rapach, Sterling’s Chief Operating Officer. “However, the A05 production rate is somewhat lower than expected, as our petrophysical analysis suggests that the well had encountered the best sands yet found across the field. RWE Dea as operator of Breagh is evaluating the data and may recommend remedial actions which could be conducted in early 2014,” added Rapach.

Sterling is a Canadian-listed international oil and gas company headquartered in Calgary, Alberta with assets in the United Kingdom, Romania, France and the Netherlands. The common shares are listed and posted for trading on the TSX-V under the symbol “SLG”.