Placing raises GBP 5 million

Sterling Energy PLC 23 December 2002 The Directors of Sterling Energy plc ('Sterling' or the 'Company') are delighted to announce that the Company has today entered into an agreement to raise £5million through a placing of 90,910,000 ordinary shares of 1p each ('Placing Shares') at a price of 5.5p per share (the 'Placing'). The Placing has been underwritten by Evolution Beeson Gregory Limited. The proceeds of the Placing, net of expenses, are approximately £4.75 million and will be used by the Company to enhance the company's exploration, appraisal and drilling programme, thus building its portfolio of reserves and prospects quicker. The Placing Shares represent approximately 26% of the Company's enlarged issued share capital. Application has been made for the Placing Shares to be admitted to trading on AIM and dealings are expected to commence tomorrow, 24 December. Information on Sterling Shares in Sterling started trading on AIM in October at 4p, following its reverse takeover and a successful £2.4 million placing and open offer. Sterling has a portfolio of five cash-flow producing gas fields offshore USA in the Gulf of Mexico. Sterling also owns a 100% working interest in a large exploration license offshore Philippines, with some 600 billion cubic feet of potential gas reserves, for which it is evaluating the potential for development through gas-to-liquids technology. In October 2002, Sterling announced the purchase of a 17.5% working interest in the Galveston 303 license offshore Texas; it has already paid back its intial cash cost and is generating cash of around $60,000 per month. Earlier this month, a successful additional well on a nearby gas field in which Sterling has a royalty interest, was announced. This was drilled at no cost to Sterling. Based on current gas prices and production projections, is expected to contribute over $180,000 per month to Sterling's pre-tax cash flow when on-stream. Sterling's strategy is to acquire producing assets in areas neglected by previous owners, to use its own technical and commercial expertise to unlock upside value and to develop a portfolio of international exploration and drilling interests. 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 / Rob Collins, Evolution Beeson Gregory: 020 7488 4040 This information is provided by RNS The company news service from the London Stock Exchange