Sterling Announces Agreement Relating to Offshore Romanian Assetsadmin
Sterling Resources Ltd. announce that it has signed a Heads of Agreement with Melrose Resources plc relating to the Pelican XIII and Midia XV Blocks located in the Black Sea, offshore Romania. In exchange for a cash consideration and a carry on future investment, Melrose will acquire a 32.5% working interest in the Pelican XIII and Midia XV Blocks.
Melrose will make a cash contribution of US $24-million for reimbursement of past costs in two tranches. An initial payment of US $12-million will be made to Sterling on closing and a further US $12-million will be paid at the time of the Doina area development project sanction or one year from the date of closing, whichever is earlier. Melrose will also carry Sterling for a proportion of their future development costs. The amount of the cost carry will be between US $58-million and US $72.7-million, depending on the gas price achieved for the development project, ensuring Sterling is carried for development activity into 2011. Sterling will retain a 32.5% working interest in the Pelican and Midia Blocks.
Melrose will become operator of the development projects, initially associated with the recently appraised Doina and Ana fields on the Midia XV Block. Sterling will retain operatorship for the exploration of the significant prospects in the remaining parts of the blocks.
The transaction completion will be subject to the finalization of a fully termed agreement and the appropriate government, partner, regulatory and financial approvals, with completion targeted for early 2009. RBC Capital Markets acted as financial advisor to Sterling.
Stewart Gibson, Sterling’s CEO, stated “We welcome Melrose to the Romanian offshore bringing their significant Black Sea development and production experience following their successful development of the Galata field, offshore Bulgaria, situated south of the Doina area. The overall package fits well with our stated strategy of bringing in strategic partners as necessary to ensure development plans stay on track whilst at the same time retaining a healthy working interest. The agreement reflects the quality of the assets already discovered and we look forward to continued exploration success in the remainder of the blocks. Once again I would like to congratulate our technical and operating teams for the success to date which has transformed the Doina area in the relatively short period since we obtained operatorship.”
Sterling Resources Ltd. is a Canadian-listed international oil and gas company headquartered in Calgary, Alberta with assets in the United Kingdom, Romania and France. The shares are listed and posted for trading on the TSX Venture Exchange under the symbol “SLG”.