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

  • General

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 and the Company’s website at All figures referred to in this press release are denominated in U.S. dollars.


  • 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


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.”


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



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.


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
T: (713) 609-9026
Manolo Zuniga
President and Chief Executive Officer
T : (713) 609-9101



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 TSX nor its regulation services provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this press release.