Sterling Resources to Wind Up after UK Sale

Calgary-based Sterling Resources said late March 3 it had agreed to sell its UK subsidiary SRUK to Dutch independent Oranje-Nassau Energie (ONE) for US$163mn cash and that, once completed, it plans to wind itself up.

SRUK’s key asset is the 30% working interest in the Ineos-operated Breagh gas field in the UK southern North Sea but it also holds 2% in the Cladhan production licence and various other exploration licenses in the UK and the Netherlands. Breagh net production to SRUK in 2017 is estimated to be 3,000 boe/d, boosting ONE’s net production from 22,000 to over 25,000 boe/d following completion of this transaction which is expected May 15.

ONE chief executive Alexander Berger said that the latest deal, following from its UK Sean gas field acquisition from Shell and Exxon, would “substantially grow our UK footprint.” The acquisition will be financed through borrowings.

Sterling said it expects net proceeds from the sale of some US$113mn. It said that, if the deal is approved, it will have no assets other than cash and that it plans to wind itself up.

Mark Smedley