Sterling Energy says to sell U.S. oil/gas business
April 6th, 2008 | by admin |LONDON, April 6 (Reuters) - Oil and gas firm Sterling EnergyPlc (SEY.L: Quote, Profile, Research) plans to sell its U.S. business to focus on topexploration prospects in Africa and northern Iraq and possibletakeovers, the firm said on Sunday.
Sale of the U.S. business will enable the firm to repay debtand have a significant amount of cash, it said in a statement.
The board of Sterling, listed on London’s AIM market,recently completed a strategic review and concluded it would bein shareholders’ interests to sell the U.S. unit.
“Sterling will focus on an increasing number of higherimpact exploration prospects,” a statement said. “It will alsopursue new opportunities including potential acquisitions.”
Some of the key exploration prospects are located inMadagascar, Kurdish areas of northern Iraq, Gabon, Cameroon andAGC, a joint exploration zone between Senegal and Guinea Bissau.
“In particular, I am very excited about Kurdistan andMadagascar where independent studies have indicated a combinedunrisked net economic value at potentially over $2 billion ifboth prospects are successful at the best estimate level,” ChiefExecutive Graeme Thomson said in the statement.
Sterling has hired BMO Capital Markets to manage the sale ofthe U.S. business, which has development and explorationprojects mostly in the onshore areas of the U.S. Gulf Coast andshallow water regions of the Gulf of Mexico, it added.
At the end of March, Sterling’s U.S. net production was arecord 5,333 barrels oil equivalent per day.
Year-end 2007 U.S. proved and probable reserves for the unitwere 18.5 million barrels oil equivalent, of which provedreserves accounted for about 65 percent, according toindependent consultants’ reports, the firm said.
Sterling shares, which have shed 40 percent so far thisyear, closed on Friday down 4.7 percent at 8.53 pence. (Reporting by Eric Onstad; Editing by Paul Bolding)
