Business
Agreed Sale of USA Business
Agreed Sale of USA Business.
About this update from Afentra Plc
[{"type":"text","content":"\n RNS Number : 0489B Sterling Energy PLC 20 October 2009 \n \n\n20 October 2009\n\nSTERLING ENERGY PLC\n(\"Sterling\" or the \"Company\")\n\nAgreed Sale of USA Business;\nProceeds Will Repay All Bank Debt\n\nSterling (AIM: SEY), the independent oil and gas exploration and production company with interests in the Middle East, Africa and the USA, is pleased to announce that it has today signed a binding sale agreement in respect of its USA business to a non-USA buyer. The agreed initial gross consideration is US$90 million \npayable on completion and further amounts may become payable depending on future oil and gas prices over the next three years.\n\nBackground\n\nSterling's USA business includes exploration and production projects, primarily in the onshore Gulf Coast and shallow waters of the Gulf of Mexico. Independent third party and Company reserve reports, effective 1 April 2009, estimated proved and probable reserves of 53 and 41 billion cubic feet of gas equivalent respectively, of which 73% is gas and 27% is oil. Average production to date in 2009 is 20.5 million cubic feet of gas equivalent per day. In the year to 31 December 2008, the Company's USA business generated revenues of US$83.2 million and a gross profit of $23.5 million.\n\nIn April 2008 Sterling announced its intention to sell the USA business following a comprehensive strategic review of the Company's assets and prospects. This review concluded that focusing the Company's \nresources on higher impact opportunities in Africa and the Middle East would be in shareholders best interests. \n\nProgress with the sale process, which was handled by BMO Capital Markets, had been impacted by the banking and credit crisis and major falls in US natural gas prices from the record levels of mid-2008. Recently, the stability in the US gas price has prompted renewed third party interest in the USA business and Sterling's recent refinancing placed the Company in a stronger position to negotiate a fair price for its US business and thus conclude today's agreed sale.\...