STRE01 PRO Proposed amendments Bondholder presentation 28 November 2014
Table of contents Background and proposed amendments Company update Appendix November 2014 Bondholder Presentation Page 2
Background for proposal Following the bond issue in April 2013, Sterling has experienced several challenges related to the Breagh field which has impacted Liquidity impact through Q3 2014 both past and near term cash flow: Delayed…
Financing outlook Despite running out of free cash around end November 2014, Sterling expects the free cash deficit to be fairly limited through to mid 2015 This is due to a concentration of Breagh and exploration and appraisal…
Amendment proposal no change in payment schedule for bondholders Bond amendments: No monthly transfer of cash into DSRA to accrue for interest payments and instalments for DSRA balances pre and post proposed amendments (m) the period…
Table of contents Background and proposed amendments Company update Appendix November 2014 Bondholder Presentation Page 6
Overview of Sterling Resources E&P independent listed on TSXV (Toronto, ticker SLG) Market cap of 90m (25 November 2014, at C0.265/share) Net debt of 173m(2) at 30 September 2014 4 areas of operations: UK, Romania, France and the…
Material Reserves & Contingent Resources Sterling: Reserves and contingent resources Buildup of reserves and contingent resources NET RESERVES WORKING ASSET & RESOURCES DESCRIPTION INTEREST (1)(2) MMboe (1) CURRENT PRODUCTION /…
UK production growing and diversifying over next 5 years Sterlings UK production should increase materially in coming years: Four additional production wells and two sidetracks of existing wells with hydraulic stimulation on…
Breagh: field summary and production guidance Participants Sterling (30%), RWE Dea (70%, op.) Facilities completed and commissioned Field 2P Reserves(1) 596 Bcf sales gas, 2.4 MMb condensate Production stable at 150 MMscf/day sales…
Breagh: production performance in 2014 A08 Online A07 Online Instrumentation fouling TGPP vessel inspection & minor modifications Instrumentation replacement Slug catcher Slug catcher Field total (100%) wet gas…
Breagh: very successful results from stimulation operations Two successful hydraulic stimulations so far Conducted over Breagh Alpha platform while producing Hydraulic stimulations key details Jackup drilling rig (ENSCO 70) with…
Breagh: A08 stimulated zones and correlation sections A03 A08 A05z Max Potential 55MMscf/d 20 MMscf/d 15 MMscf/d 4 MMscf/d 37 MMscf/d November 2014 Bondholder Presentation Page 13
Breagh: further wells and capex Remaining Phase 1 development Remaining net project capex US 131 million from start of Q4 2014, including: Onshore compression installation over 20152017 Drilling of A09 and A10 wells in second half…
Breagh: production outlook Breagh: Production outlook (Sterling estimates and RPS 2P profiles(1)) Sterling profile represents management view not audited by RPS Phase 1 only 12 wells, A07A12 all with hydraulic stimulation…
Breagh: cash flow generation (Phase 1, 12 wells) Cash flow projections (201419, net to Sterling) (1) PHASE 1 (net to Sterling, remaining bond life) Operating Cash Flow (1)(2) 498m Capex (3) 130m Net Cash Flow 368m Table shows…
Breagh: future plans additional upside Breagh infield upside P50 contingent resource of 6.8 MMboe net from deeper horizon Appraisal upside Well planned on Crosgan discovery after Breagh A08 work (spudding November 2014)…
Cladhan: additional cash flow from 2015 Cash flow projections (201419, net to Sterling)(1) CLADHAN (net to Sterling, remaining bond life) Operating cash flow(1) 81m Capex 2m Net cash flow 79m Two separate carry arrangements with…
Significant value in tax losses Sterling Resources UK tax position Issuer has very significant UK tax losses: As of 30 September 2014: 413m Ring Fenced Corporation Tax loss and 384m Supplementary Corporation Tax loss (Sterling…
Group and Issuer balance sheets GROUP BALANCE SHEET m ISSUER BALANCE SHEET m 30 Sep 2014 31 Dec 2013 30 Jun 2014 31 Dec 2013 Assets Assets Cash & Cash Equivalents (1) 23 35 Cash & Cash Equivalents 6 15 Restricted cash 34 8…
Table of contents Background and proposed amendments Company update Appendix November 2014 Bondholder Presentation Page 22
Romania: significant contingent resources P50 Best Est. Block Interest CR(1) PR(1) 28 Bcf Block 13 Pelican 65%, op 38 Bcf 44 MMb Block 15 Midia (Shallow) 65%, op 216 Bcf 1088 Bcf Block 25 Luceafarul 50%, op 52 Bcf 53 Bcf Block…
UK Central North Sea: contingent oil resources UKCS blocks 21/30f & 22/26c (Sterling 20%, Shell (operator) 60%, Ithaca 20%) Discovered oil in Evelyn and Belinda P50 Contingent Resources 4.1 MMboe net(1) Best Estimate…
Netherlands: probable oil development Sterling is operator of Jurassic and Early Cretaceous horizons in licences F17a, F18 (Sterling 35%) Contingent and prospective oil resources in F17a/18 Net 12 MMbbls contingent oil…
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