New production well

Sterling Energy PLC 11 December 2002 New production well Sterling Energy plc is delighted to announce the successful completion of the Gryphon Number Two (#2) production well in the High Island 52 Field in the Gulf of Mexico. The well is currently being connected to the field's production platform, and is expected to produce gas flows significantly in excess of initial expectations, early in 2003. Sterling Chief Executive Harry Wilson said: 'This demonstrates again our successful strategy of identifying unexploited potential in existing fields. Shareholders stand to benefit significantly from additional royalty revenues achieved at no drilling risk to Sterling.' Sterling's strategy in the Gulf of Mexico is to acquire producing assets in areas neglected by previous owners, and to use its own technical and commercial expertise to unlock upside value. The company acquired its interest in the High Island 52 field in late 2000, and sold an interest in one part of the field to Gryphon Exploration who undertook to carry the drilling risk at no cost to Sterling. The Gryphon #1 well came on stream at over 20 million cubic feet per day (mmcf/d) in 2001, and the completion of Gryphon #2 is now expected to increase production significantly. Sterling has retained a 7.58% royalty interest in the lease that includes the Gryphon wells. Early indications are that Gryphon #2 has the potential to produce at a similar or better rate than Gryphon #1. Should this prove to be the case, it would add, at current gas prices, over $180,000 per month to Sterling Energy's pre-tax cash flow. Gas prices in the US are now at $4 /mcf and according to the futures market, likely to remain high for the foreseeable future. Sterling has an ongoing programme which will see the recompletion and drilling of up to 6 wells in 2003. This activity should add further to the company's production and cash flow from its six producing properties in the Gulf of Mexico. Sterling also owns a 100% working interest in a large exploration license offshore Philippines. Shares in Sterling started trading on the Alternative Investment Market in October 2002 following its reverse takeover by LEPCO plc and a successful placing and open offer. For further information contact: Harry Wilson, Chief Executive, Sterling Energy plc: 01582 462 121 Graeme Thomson, Finance Director, Sterling Energy plc: 01582 462 121 Allan Piper, First City Financial Public Relations: 020 7436 7486 07050 203 304 Chris Callaway, Evolution Beeson Gregory: 020 7071 4324 This information is provided by RNS The company news service from the London Stock Exchange