UK: Sterling Announces Results of Cladhan Appraisal

Sterling Resources Ltd. (“Sterling” or the “Company”)  announces the completion of drilling of the 210/30a-4Y well on Block 210/30a in the United Kingdom North Sea. This is the third well (second side-track) drilled in the current four well campaign to further appraise the extent of the Cladhan reservoir.

The 210/30a-4Y well was drilled at a location 2.9 kilometers southwest of the most recent 210/30a-4Z well, utilizing the Transocean Prospect rig from a centrally positioned location. The objectives of the 210/30a-4Y sidetrack well were to appraise the “central channel” in the Cladhan area.

The 210/30a-4Y well was drilled to a total measured depth (MD) of 12,615 feet encountering 40 feet (vertical thickness) of high quality Upper Jurassic sands. Petrophysical analysis describing porosities up to 25% also showed the sands to be water wet. Pressure measurements confirm that the interval is over-pressured, but to a lesser extent than in the discovery area and that the sands in this well are water bearing. The implication of this information is that the “central channel” is separate from the main reservoir in the “northern channel” area.

“While disappointed to encounter wet sands, in this separate channel compartment, we are encouraged with the quality of the reservoir at this location which positively aids our understanding of reservoir quality distribution within the Cladhan area,” remarked John Rapach, Sterling’s Chief Operating Officer. “Our final appraisal well in the current campaign will target the heart of a channel sequence approximately 1 kilometer south and approximately 150 feet updip of the oil bearing 210/30a-4 well, proving up this southern sector of the “northern channel”area. Our development planning is concentrating on either a subsea tie-back or FPSO development of the “northern channel”area with the option for upside resource exploitation to the east after further appraisal drilling. We maintain our target of first oil in 2014, with plans for pipeline route and environmental survey work to commence over the next month,” added Mr. Rapach.

Medium term plans include the reprocessing and interpretation of the existing seismic dataset and incorporation of all of the log, core, fluid and pressure results obtained during this current drilling campaign. The next drilling campaign will probably commence in early 2012.

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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Source: Sterling, May 19, 2011