Sterling Resources Announces Signing of Loan Facility for Breagh Development
By Sterling Resources Ltd., PRNEMonday, July 18, 2011
CALGARY, Canada, July 19, 2011 -
Sterling Resources Ltd. (TSX-V:SLG) (”Sterling” or the
“Company”) is pleased to announce that it has signed a loan
facility agreement (the “Facility”) with a group of banks for a GBP
105 million senior secured loan for the Phase 1 development by its
wholly-owned subsidiary, Sterling Resources (UK) Ltd, of the Breagh
gas field in the UK Southern North Sea (Sterling 30 percent).
The loan amount provided under the Facility comprises a main
tranche of GBP 95 million and a cost-overrun tranche of GBP 10
million, and the loan has a life of 6.5 years.
The Facility also has a step-up amount of up to GBP 50 million
for the Phase 2 development on an uncommitted basis.
The Facility has been arranged with Société Générale Corporate
& Investment Banking (acting as Sole Bookrunner, Mandated Lead
Arranger and Technical Bank), BNP-Paribas (acting as Mandated Lead
Arranger and Facility Agent) and Commonwealth Bank of Australia
(acting as Mandated Lead Arranger).
The Company is now awaiting final approval of the Field
Development Program by the UK Department of Energy and Climate
Change.
Phase 1 of the Breagh development comprises a platform on the
western side of the field from which 10 wells will be drilled, a
100 kilometer 20 inch gas export pipeline to Teesside together with
an associated smaller pipeline and cable, and an onshore pipeline
and modifications to the Teesside Gas Processing Plant. Work
on this phase of the development continues to progress well.
Fabrication of the topsides is 90 percent complete and
commissioning is expected to begin next week. The jacket is
77 percent complete and expected to be fully complete by the end of
this month. Sail-out and installation is expected during
early September 2011. The Company previously reported that
the 3 inch methanol line and 20 inch export gas line have been laid
away to the platform location and the beach crossing for both lines
has been made. Over the remainder of July, the Company
expects to connect the beach crossing lines to the offshore lines,
thereby completing the pipeline from the platform location.
Onshore pipeline operations are expected to commence in early
August. It is planned to achieve peak full field 2P
production for Phase 1 in 2015 at 167 million cubic feet of sales
gas per day (MMcf/d) (100 percent) as estimated by the Company’s
independent reserves evaluator RPS Energy.
Phase 2 of the Breagh development is currently under
consideration and could comprise a second platform with further
wells on the eastern side of the field, tied back to the first
platform, or possibly a sub-sea development. Assuming this
goes ahead, incremental production from Phase 2 would be expected
to commence in 2013 and peak full field 2P sales gas production
would be expected in 2016 at 186 MMcf/d (100 percent), as estimated
by RPS Energy.
“The signing of this Facility is the culmination of many months
of close collaboration with our bank group. The discussions
took considerable time due to the nature of the two phased
development and the impact of the successful 42/13a-6 well drilled
earlier this year. We are delighted to have a bank group that
is keen to support Sterling’s other future development projects and
we look forward to beginning discussions on a step-up in the
Facility for Phase 2 of Breagh,” said David Blewden, Sterling’s
CFO.
“This is a very important step in enabling Sterling’s
development from exploration company to a full-cycle exploration,
development and production company,” commented Mike Azancot,
Sterling’s President and CEO. “We can now look forward to
bringing Phase 1 of Breagh on-stream in the middle of next year and
we are already working on defining the Phase 2 development with
operator RWE Dea UK SNS Limited. Together with the recently
announced reserves increase, we are delighted with how the project
is progressing,” he added.
Sterling Resources Ltd. 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
shares are listed and posted 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.
Filer Profile No. 00002072
Forward-Looking Statements
All statements included in this press release that address
activities, events or developments that Sterling expects, believes
or anticipates will or may occur in the future are forward-looking
statements. Specific forward-looking statements in this press
release include statements regarding the timing and expectations
for pipeline interconnection from Teeside to the Breagh field, the
timing of completion of Phase 1 and full-field production there
from and expectations regarding Phase 2 development and
production. In addition, statements relating to reserves,
resources or anticipated production are deemed to be
forward-looking statements as they involve the implied assessment,
based on certain estimates and assumptions that the reserves and
resources described can be profitably produced in the future.
These forward-looking statements involve numerous assumptions
made by Sterling based on its experience, perception of historical
trends, current conditions, expected future developments and other
factors it believes are appropriate in the circumstances. In
addition, these statements involve substantial known and unknown
risks and uncertainties that contribute to the possibility that the
predictions, forecasts, projections and other-forward looking
statements will prove inaccurate, certain of which are beyond
Sterling’s control, including: the impact of general economic
conditions in the areas in which Sterling operates, civil unrest,
industry conditions, changes in laws and regulations including the
adoption of new environmental laws and regulations and changes in
how they are interpreted and enforced, increased competition, the
lack of availability of qualified personnel or management,
fluctuations in commodity prices, foreign exchange or interest
rates, stock market volatility and obtaining required approvals of
regulatory authorities. In addition there are risks and
uncertainties associated with oil and gas operations. Readers
should also carefully consider the matters discussed under the
heading “Risk Factors” 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 expectations upon which they are based will occur.
Sterling’s actual results, performance or achievements could differ
materially from those expressed in, or implied by, these
forward-looking statements. These statements speak only as of
the date of the press release. Sterling does not intend and does
not assume any obligation to update these forward-looking
statements except as required by law.
Financial outlook information contained in this press release
about prospective results of operations, financial position or cash
flows is based on assumptions about future events, including
economic conditions and proposed courses of action, based on
management’s assessment of the relevant information currently
available. Readers are cautioned that such financial outlook
information contained in this press release should not be used for
purpose other than for which it is disclosed herein.
For further information:
visit
or contact:
Mike Azancot, President and Chief Executive Officer, Phone
+44-7740-432883,
David Blewden, Chief Financial Officer, Phone: 44-1330-826766,
Mobile: +44-7771-740804,
George Kesteven, Manager, Corporate and Investor Relations,
Phone: +1(403)215-9265, Fax: +1(403)215-9279,
.
Tags: Calgary, canada, July 19, Sterling Resources Ltd.
