Sterling Energy says drilling operations at its Sangaw North #1 exploration well in Kurdistan remain 'challenging'.
In its IMS for the period since January 1, Sterling says the well is drilling ahead at 1,095m.
'Drilling operations remain challenging, however good progress is being made towards the top of the Cretaceous reservoirs, expected at 1,699m, which may contain best estimate gross resource of 804 mmbbl of oil. Below the Cretaceous lie additional prospective reservoirs in the Jurassic which are also planned to be evaluated by the Sangaw North #1 well.'
The well is expected to reach its target depth in the third quarter of 2010.
The company had adjusted Q1 EBITDA of $2.1m and a loss after tax of $1.3m. Cash at April 30 was $109.3m, against $113.9m at the year end. Production net to Sterling from the Chinguetti field averaged 714 bopd for the first quarter. There are no approved plans for any further development of the Chinguetti field and the company says the field may be abandoned earlier than previously expected. The Ntem Block, offshore Cameroon, remains in force majeure. Progress continues towards a resolution of the border dispute between Cameroon and Equatorial Guinea but no specific timetable can be forecast.
Sterling currently holds 100% of the Ntem licence and expects to farm out a portion of its interest in exchange for being carried for its share of drilling costs.
In Madagascar, where the government formed after last year's coup has not been recognised by its African neighbours, Sterling and ExxonMobil, its partner and operator of the Ampasindava Block, will look for an improvement in the political situation before starting any significant expenditure.
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