Sterling Resources Ltd. Reports 2018 First Quarter Financial Results and Operations Update

Calgary, Alberta and Houston, Texas — May 30, 2018—Sterling Resources Ltd. (“Sterling” or the “Company”) (TSX-V: SLG) is pleased to provide a summary of its 2018 first quarter financial and operating results as of March 31, 2018.

Selected financial, operational and reserves information is outlined below and should be read in conjunction with the Company’s unaudited consolidated financial statements (“Financial Statements”), and management’s discussion and analysis (“MD&A”) for the quarter ended March 31, 2018, which are available on SEDAR at www.sedar.com and the Company’s website at www.sterling-resources.com. All figures referred to in this press release are denominated in U.S. dollars.

2018 FIRST QUARTER HIGHLIGHTS

  • Made significant progress on first phase of oil facilities installation and is ahead of schedule
  • First production through commissioning of oil production equipment expected in June 2018
  • Costs on overall first phase coming in approximately 25 percent less than budgeted

OPERATIONS UPDATE

The Company previously announced that over the past five months, the Company has significantly advanced the 2018 capital program at the Bretana oil field. On December 18, 2017, the Company acquired a 100 percent working interest in the field and announced that the field would come online in 10 to 12 months for an estimated cost of approximately USD$24.6 million, including capital expenditures relating to oil production facilities and workovers of an existing oil producer well and a water disposal well. The Company now estimates this project will cost approximately USD$18.3 million, which is 25 percent less than originally budgeted. The Company’s use of a wireline unit, rather than a workover rig, to remove plugs and remediate the oil producer and water disposal wells cost USD$300,000, significantly less than the budgeted USD$2.0 million. Additional savings resulted from the execution of a turn-key contract to build and install all the production facilities and a corresponding contract for the personnel and costs associated with construction at the Bretana field.

The Company anticipates that the existing oil producing well will initially produce 100 percent oil with no water. The Company will commission the oil production facilities, with first production as early as June 2018, four to six months ahead of the original guidance. The initial commissioning phase will require the well to be choked to a quarter inch, which would allow the Company to produce approximately 1,000 barrels of oil per day (“bbl/d”) until the water production and re-injection handling facilities are installed and commissioned in October, after which it is anticipated that the well will be opened to approximately 2,250 bbl/d. The Company intends to sell the initial 1,000 bbl/d production at the Iquitos refinery, which has capacity to purchase the Company’s initial production, with the additional 1,250 bbl/d production to be transported via the existing oil pipeline for marketing and sale.

Manolo Zuniga, Sterling’s President and Chief Executive Officer, stated, “We continue to see opportunities to save time and capital as we prepare for the Long-Term Test of the discovery well in Bretana. This is a key milestone achieved significantly ahead of schedule and under budget. We are currently about 90 percent through installation of oil production facilities which will allow us to open the well to begin the commissioning process. This will provide both data and cash flow over the next four months, which coincides with when we plan to have the first phase of the water handling equipment installed and ready for commissioning. At that time, once we have the facilities tested, we can open the well and produce at higher rates.”

FINANCIAL HIGHLIGHTS

The following table summarizes key financial highlights associated with the Company’s financial performance.

 

ABOUT BRETANA FIELD

Oil in the Bretana field was first discovered in the 1970’s and was subsequently re-discovered by Gran Tierra Energy Inc. (“Gran Tierra”). Several wells have been drilled to delineate the field and recent seismic has de-risked the structure. The rediscovery well drilled by Gran Tierra in 2014 tested 18.5 degree API oil from the Vivian formation. The Northern oil fields in Peru have produced over one billion barrels of oil, mostly from the Vivian formation. The Company acquired the assets in Peru on December 18, 2017 from Gran Tierra.

ABOUT STERLING

Sterling is a publicly-traded oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. The Company’s management team has significant experience in developing oil fields in Northern Peru and is led by an independent Board of Directors, focused on safely and cost effectively developing and exploiting the Bretana oil field.

 

For further information, please contact:

Greg Smith
Executive Vice President and Chief Financial Officer
Gsmith@Petrotal-Corp.com
T: (713) 609-9026
Manolo Zuniga
President and Chief Executive Officer
Mzuniga@Petrotal-Corp.com
T : (713) 609-9101

http://www.sterling-resources.com/

 

FORWARD-LOOKING STATEMENTS

All statements included in this news release that address activities, events or developments that Sterling expects, believes or anticipates will, should or may occur in the future are forward-looking statements.  In particular, this news release contains forward-looking statements with respect to the timing of the Company’s name change, the anticipated consolidation of the Common Shares, the timing of the consolidation and the ratio between the pre-consolidation Common Shares for each one post-consolidation Common Share.

These forward-looking statements involve assumptions made by Sterling based on its experience, perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. These statements involve substantial known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other-forward looking statements will prove inaccurate, certain of which are beyond Sterling's control, including: trading volumes and volatility in the price of Common Shares on the market as such trading may impact the applicable consolidation ratio to be implemented by the Company, if at all. Readers should also carefully consider the matters listed under the heading "Risk Factors" in the Company's MD&A.

Undue reliance should not be placed on these forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. Sterling's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements. These statements speak only as of the date of the news release. Sterling does not intend and does not assume any obligation to update these forward-looking statements except as required by law.

Neither the TSXV nor its regulation services provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.


Sterling Resources Ltd. Provides Operations Update in Respect of The Bretana Oil Field

Calgary, Alberta and Houston, Texas – May 16, 2018—Sterling Resources Ltd. (“Sterling” or the “Company”) (TSX-V: SLG) is pleased to provide an update on its operations in Block 95 of the Bretana oil field in Northwest Peru.

OPERATIONS UPDATE

Over the past five months, the Company has significantly advanced the 2018 capital program at the Bretana field. On December 18, 2017, the Company acquired a 100 percent working interest in the field and announced that the field would come online in 10 to 12 months for an estimated cost of approximately USD$24.6 million, including capital expenditures relating to oil production facilities and workovers of an existing oil producer well and a water disposal well. The Company now estimates this project will cost approximately USD$18.3 million, which is 25 percent less than originally budgeted. The Company’s use of a wireline unit, rather than a workover rig, to remove plugs and remediate the oil producer and water disposal wells cost USD$300,000, significantly less than the budgeted USD$2.0 million. Additional savings resulted from the execution of a turn-key contract to build and install all the production facilities and a corresponding contract for the personnel and costs associated with construction at the Bretana field.

The Company anticipates that the existing oil producing well will initially produce 100 percent oil with no water. The Company will commission the oil production facilities, with first production as early as June 2018, four to six months ahead of the original guidance.  The initial commissioning phase will require the well to be choked to a quarter inch, which would allow the Company to produce approximately 1,000 barrels of oil per day (“bbl/d”) until the water production and re-injection handling facilities are installed and commissioned in October, after which it is anticipated that the well will be opened to approximately 2,250 bbl/d.  The Company intends to sell the initial 1,000 bbl/d production at the Iquitos refinery, which has capacity to purchase the Company’s initial production, with the additional 1,250 bbl/d production to be transported via the existing oil pipeline for marketing and sale.

Manolo Zuniga, President and Chief Executive Officer of the Company, commented, “The Company’s progress to date is a direct result of having the right team in place to execute our program.  Their expertise, along with financial discipline, has set the stage to deliver production ahead of schedule and significantly under budget.  Not only is the capital expenditure savings significant, but the initial oil production and sales will bring important cash flow to the Company.”

A full review of the progress at the Bretana field can be found in the updated corporate investor presentation which is available on the Company’s website at www.sterling-resources.com.

ABOUT STERLING

Sterling is a publicly-traded oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru.  The Company’s management team has significant experience in developing oil fields in Northern Peru and is led by an independent Board, focused on safely and cost effectively developing and exploiting the Bretana field. The Bretana field is being developed on a modular basis which allows the Company to install the oil and water handling facilities in phases, allowing for more efficient use of capital during the field development.

 

For further information, please contact:

Greg Smith
Executive Vice President and Chief Financial Officer
Gsmith@Petrotal-Corp.com
T: (713) 609-9026
Manolo Zuniga
President and Chief Executive Officer
Mzuniga@Petrotal-Corp.com
T : (713) 609-9101

http://www.sterling-resources.com/

 

READER ADVISORIES

FORWARD-LOOKING STATEMENTS: This press release may contain certain statements that may be deemed to be forward-looking statements. Such statements relate to possible future events, including, but not limited to: the Company’s objectives; the Company’s capital program, capital budget, cash flow and proposed drilling, reactivation, water and other activities and the anticipated costs and results of such activities; cost controls and savings; anticipated future production and revenue; future development and growth prospects. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “anticipate”, “believe”, "expect", “plan”, “estimate”, “potential”, “will”, “should”, “continue”, “may”, “objective” and similar expressions. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for Sterling’s products, the availability and performance of drilling rigs, facilities, pipelines, other oilfield services and skilled labour, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the accuracy of Sterling’s geological interpretation of its drilling and land opportunities, current legislation, receipt of required regulatory approval, the success of future drilling and development activities, the performance of new wells, the Company’s growth strategy, general economic conditions, availability of required equipment and services and prevailing commodity prices. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), commodity price and exchange rate fluctuations, legal, political and economic instability in Peru, access to transportation routes and markets for the Company’s production, changes in legislation affecting the oil and gas industry and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Please refer to the risk factors identified in the Company’s annual information form and management’s discussion and analysis for the year ended December 31, 2017 which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Neither the TSXV nor its regulation services provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.


Sterling Resources Ltd. Announces Mailing of Meeting Materials and Details of Proposed Share Consolidation and Name Change

Calgary, Alberta and Houston, Texas – May 9, 2018—Sterling Resources Ltd. (“Sterling” or the “Company”) (TSX-V: SLG) is pleased to announce that it has mailed a management information circular (the “Circular”) to holders (“Shareholders”) of its common shares (“Shares”) in connection with an annual general and special meeting (the “Meeting”) of Shareholders to be held in the Clarkson & Tétrault Boardroom at the offices of McCarthy Tétrault LLP, Suite 4000, 421 – 7th Avenue S.W., Calgary, Alberta on Wednesday, May 30, 2018 at 10:00 a.m. (Calgary time).

At the Meeting, Shareholders will be asked to consider for approval, among other things, a resolution authorizing a consolidation of the Shares on the basis of a ratio of between four and eight pre-consolidation Shares for each one post-consolidation Share (the “Consolidation”) and a resolution authorizing a change of the Company’s name to “PetroTal Corp.” (the “Name Change”).

CONSOLIDATION

The Company has experienced a significant increase in its share count as a result of the reverse take-over with PetroTal Ltd. (“PetroTal”) and the acquisition of Gran Tierra Energy International (Peru) Holdings B.V., an indirect wholly-owned subsidiary of Gran Tierra Energy Inc., completed on December 18, 2017. The Company wishes to reduce the outstanding share amount to a level more in keeping with its industry peers. The Company believes the Consolidation will provide a share capital structure that will better attract investors and enhance future growth opportunities. The exact Consolidation ratio will be determined by the board of directors of the Company (the “Board”) when the Board considers it to be in the best interests of the Corporation to implement such a Consolidation. Notwithstanding approvals being received, the Board may determine not to proceed with the Consolidation, at its discretion.

The Company currently has 537,740,991 issued and outstanding Shares. In the event that the Consolidation is completed, for example, on a four for one basis, the Company would have approximately 134,435,248 Shares outstanding following the Consolidation. In addition, the exercise price and number of Shares issuable upon the exercise of outstanding convertible securities, including purchase warrants, will be proportionally adjusted upon the implementation of the Consolidation.

NAME CHANGE

The Company proposes to change its name to “PetroTal Corp.” to reflect its current business activities. Prior to the reverse take-over, PetroTal actively pursued opportunities in Latin America, specifically Peru, since inception in 2016.  The Company’s management team is known by local officials and counterparties in Peru as PetroTal and the management team believes the name has value in the country.

Approval of the Consolidation and Name Change by Shareholders would, subject to approval of the TSX Venture Exchange (the “TSXV”), allow the Board to implement the Consolidation and Name Change without any further action on the part of Shareholders.

Further details with regard to the background, reasoning and impact of the Consolidation and the Name Change, are contained in the Circular dated April 30, 2018, a copy of which is available on SEDAR at www.sedar.com.

ABOUT STERLING

Sterling is a publicly-traded oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. The Company’s management team has significant experience in developing oil fields in Northern Peru and is led by an independent Board, focused on safely and cost effectively developing and exploiting the Bretana oil field.

 

For further information, please contact:

Greg Smith
Executive Vice President and Chief Financial Officer
Gsmith@Petrotal-Corp.com
T: (713) 609-9026
Manolo Zuniga
President and Chief Executive Officer
Mzuniga@Petrotal-Corp.com
T : (713) 609-9101

http://www.sterling-resources.com/

 

READER ADVISORIES

FORWARD-LOOKING STATEMENTS: This press release may contain certain statements that may be deemed to be forward-looking statements. Such statements relate to possible future events, including, but not limited to, the Consolidation and the Name Change.  All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “anticipate”, “believe”, "expect", “plan”, “estimate”, “potential”, “will”, “should”, “continue”, “may”, “objective” and similar expressions. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the timely receipt of all required Shareholder, TSXV and regulatory approvals. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks.  Please refer to the risk factors identified in the Company’s annual information form and management’s discussion and analysis which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Completion of the Consolidation and Name Change are subject to a number of conditions, including but not limited to, TSXV acceptance. There can be no assurance that the Consolidation and Name Change will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the Circular prepared in connection with Meeting at which Shareholder approval will be sought for the Consolidation and Name Change, any information released or received with respect to the Consolidation and Name Change may not be accurate or complete and should not be relied upon.

The TSXV has in no way passed upon the merits of the Consolidation and Name Change and has neither approved nor disapproved of the contents of this press release.

Neither the TSXV nor its regulation services provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.