Business
Trading Update
Trading Update.
About this update from Afentra Plc
[{"type":"text","content":"\n Sterling Energy PLC\n24 July 2006\n\n\n24 JULY 2006\n\n\n STERLING ENERGY PLC\n ('Sterling' or the 'Company')\n\n\n\n TRADING UPDATE\n\n\n\nSterling Energy today published the following Trading Update.\n\nThe Company's performance in the first six months of 2006 has been materially\nbetter than the comparable period in 2005.\n\nAverage daily Group production rose from the corresponding period by in excess\nof 150% to more than 25 million cubic feet of gas equivalent per day ('mmcfged')\n\nRealised Gulf of Mexico prices were up over 12% to US$7.25/mcfge and average\nproduction was over 7.8 mmcfged in the period (year 2005: 9.7 mmcfged). US\nproduction levels have recently risen to over 10.1 mmcfged, 35% up on the first\nquarter, with new wells fully onstream and with greater equipment availability.\nThe Company recently spudded an onshore well, Trehan1, in S Louisiana, the first\nof four exploration wells planned in the US in the second half which together\ncould materially impact reserves and production.\n\nThe start-up of the Chinguetti Field in late February 2006 also contributed\nstrongly to cashflow, with US$32 million received from three first half cargo\nsales and royalties. The next lifting is expected in early August 2006. The\nField operator continues to address the technical and operating issues in this\nfirst field to be developed offshore Mauritania. Lower than expected production\nwas offset in the period by higher than expected oil prices. Current gross field\nproduction rates are 35-40,000 barrels of oil per day ('bpd'). Sterling expects\nthat these issues will be progressively addressed and resolved over the course\nof 2006/early 2007, including with infill wells. Whilst the expectation of\nfuture production rates are lower than initially projected by the operator, the\ncurrent studies and operations will help to clarify the optimum future\nproduction levels and will enable estimates of Chinguetti and other Mauritanian\nreserves to be updated later in the year. Currently, US$96 million of the US$130\nmillion letter of credit provided under the Funding Agreement has been drawn.\n\nA declaration of commerciality is expected by year-end on the Tiof field, in\nwhich Sterling has a sliding scale royalty interest over 6% and for which it\npays no development costs. An initial gross 50,000 bpd production level in 200...