Business
Completion of Sale of USA Bus
Completion of Sale of USA Bus.
About this update from Afentra Plc
[{"type":"text","content":"\n RNS Number : 5060D Sterling Energy PLC 03 December 2009 \n \n\n3 December 2009\nSTERLING ENERGY PLC\n(\"Sterling\" or the \"Company\")\n\nCompletion of Sale of USA Business & All Bank Debt Repaid\n\nSterling (AIM: SEY), the independent oil and gas exploration and production company with interests in the Middle East, and Africa, is pleased to announce that it has today completed the sale of its USA business to the Atinum Group from Korea. The Company's outstanding bank debt has been repaid in full. The sale process was handled by BMO Capital Markets\n \nBackground\n\nSterling's USA business comprised 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 for 2009 to 30 September was 21.2 million cubic feet of gas equivalent per day. In the year to 31 December 2008, the Company's USA business generated revenues of $83.2 million and a gross profit of $23.5 million.\n\nTerms of Sale\n\nThe initial sale consideration was $90 million with an effective date of 1 April 2009 and on completion was adjusted for intra-Group cash movements since 1 April 2009 and other costs.\n\nIn addition to the initial consideration, there is a three year 'upside sharing agreement', under which Sterling is entitled to a 40% share of the annual excess net production proceeds (arising from the disposed USA business) if the average realised oil price exceeds $90 per barrel and/or the realised gas price exceeds $9 per thousand cubic feet in any of the years 2010-2012.\n\nUse of Sale Proceeds\n\nAfter adjusting for cash received from the USA business since 1 April 2009 and the various bank and other expenses associated with the sale, Sterling's net consideration is $78.9 million&nb...