CALGARY and HOUSTON,
May 16, 2018 /CNW/ - 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.
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.
SOURCE Sterling Resources Ltd.
