anyone got any ideas about the block trades that went through today?

website: http://www.sterlingenergyplc.com/



weather: www.nhc.noaa.gov/refresh/graphics_at4+shtml/084938.shtml?50wind120

Such a dilema, to buy more now or wait a while to see what happens with the placing shares. Think I might wait a bit and see what happens. It's certainly a tough call! But looking to the future, a couple of pence here or there will be irelevant.

From Rigzone.com:

Sterling Energy has secured a position as a strategic partner of the Mauritanian government. It has reached a conditional agreement to share in the revenues from the government's 12% interest in the 120 million barrel Chinguetti offshore oil field.

Sterling Chief Executive, Harry Wilson said: "This represents a stunning deal for Sterling, and establishes us as a key player in Mauritania, now recognized as one of the global hotspots for oil exploration and development activity. It cements our close relationship with the Mauritanian Government going forward as we have been confirmed as a strategic partner of the Government to help it develop its additional oil and gas assets."

Chinguetti, due on stream in early 2006, and operated by Woodside, is expected initially to produce 75,000 barrels of oil per day.

Sterling is paying a $15.5 million signature bonus, and providing a letter of credit for $130 million to cover the Government's share of past costs, forward development costs and contingencies. In return, Sterling will receive income from a sliding scale share of the field's production.

Sterling is seeking to raise 97 million (US$ 175 million) to fund the deal and supplement its cash balances, through an institutional placing. A shareholders' meeting has been convened for 18 November.

Sterling is already involved in Mauritania as a result of its successful 40 million take-over last December of Fusion Oil & Gas plc. That gave Sterling production royalty interests in offshore license areas PSC A and PSC B with no future capital costs paid by Sterling.

A 20-well program is currently under way in PSC A and B, which includes development drilling on Chinguetti, appraisal of the 2003 Tiof discovery, and a five well exploration program, the first well of which resulted in the Tevet discovery last month.

They wrote all that 3 times???

Wow!

I see that as significant that SEY are now above yesterdays start price of 19.25p.

That shows the mood currently of punters and city although there are not huge volumes today.

Moving up again today, looks like it is seen as a positive this placement and the subsequent deal, with the price of oil at the moment and the future requirements of China regarding Oil I can only see a bright future for this company, just glad i'm in for the long term now...

Whoops! It was posted over 3 pages, so the copy and paste must have copied it 3 times. Will edit it.

Will be interesting to see how the price holds up for the rest of the day and week. wish I could get to buy in in this placing!

Thanks gav, adie agreed.

Oil is the place to be.

The confidence shown in the price makes me feel much more relaxed than yesterday.

Now the up and down really does not matter.

Of course as a Strategic Partner, SEY may well be in a position to do the same with Tevet as well, the difference being they will have a fair amount of cash to do it next time the options are due.

And any other finds.......

Could be a very strong upward movement if this is mentioned at the EGM.

Significant change in Company fortunes this deal I think!

A few sellers appearing now, so I doubt it will hold at 19.5p mid.

Right, no more trivials. I'm off...............................

Back later!

goood mooornnnnning all....

well, more days, more news and i am feeling more positive. demand will be high for the placement, the companies size id transformed and all we need is a bit of a strike and these will move swiftly through 20. this is a LONG TERM HOLD. sit back, realx and enjoy the show.

This is a large number of shares that are to be added. I would like to know what price they are going to be sold at?I would have thought this was already known and if it is c 17p i think it will peg the price for a while. I think its annoying as this was going to fly short ,medium and long term. Because of current uncertainty cant afford to have money sitting stagnant, but will be keen tio get back in when I can assess wht the future holds more accurately

Just found this, lovely jubbly! From Killik and Co's morning note:

STERLING ENERGY Mauritania further thoughts



We met with the board of Sterling Energy yesterday to flush out more detail on yesterdays acquisition. The bottom line for those that want to just get to the point is that the impending placing of new shares (which we intend to participate despite the tight timing) looks very attractive. Do speak to your broker for further information. Risk rating high due to the small company status.



Sterling Energy first gained exposure to the Mauritanian interest last year through the acquisition of Fusion Oil and Gas. This company benefited from a royalty agreement with Premier Oil based upon production from areas of Mauritania. As a result, Sterling energy was in a unique position technically competent in the area but not conflicted in its positioning when working with the Government of Mauritania. The government has an option to acquire a 12% stake in any field off its coast but the Chingeutti field was due to expire in late November. It cannot afford or raise finance to take its stake, nor does it necessarily have the expertise to be a partner in this venture. It needed therefore a partner that could help it finance and run effectively a state oil company. Despite intense competition, it selected Sterling Energy.



Sterling now has to move quickly. In order to provide the letter of credit, it has to raise 97 million of new equity from the markets. A placing price has not yet been set but the market price of Sterling shares at 19p indicates the market has settled on the intended price. This finance will be provided to the new company (in which Sterling is estimated to gain access to 70% of the profit oil after all costs have been recovered). To provide some indication of the field, it is thought to hold 139 million of 2P risked reserves. This could rise to an estimated 205 million. Production from this field is anticipated to begin in early 2006 and full production of around 75,000 barrels a day will be achieved quickly (the structure of the field is pretty straight forward). It is anticipated that the cash flow will be sufficient to repay the financing of this deal will be a rapid tow years and increase Sterling Energys reportable group cash flow from 20 million to nearly 60 million by 2006. On less than 5x 2006 cash flow, the stock is very cheap.



Of further significant interest is that Sterling, being seen as a strategic partner to the Government is in a very strong position to repeat this exercise when further fields come on stream. The Tiof field may come on stream in 2005/6 and its proven and probable reserve (2P) is nearly three times as great as Chinguetti! The fact that Sterling is going for an equity raise at this stage and with the associated cash flow from this new venture, it should be able to go for gearing next time around.



Given anticipated cash flow per share of 4p, this stock is capable of moving from the 15-20p region to the 25-30p region comfortably but the deal has opened the door for further significant moves to the upside. For higher risk investors, the opportunity to participate in the placing is highly attractive. Inform your broker of any interest by close of play tomorrow.

gavdfc - very interesting and positive reading!

From Business Times online:

Sterling Energy shed p at 18p on providing $130 million funding to the Mauritanian Government, in exchange for which it will acquire a 12 per cent stake in the Chinguetti field. The deal is expected to double next years earnings per share.

great article in the FT as well. not in the small cap briefing but an entire column in smaller companies UK. lovely story.

Just read it online. You're right Prop, it does make good reading. This deal is going to add a massive amount of cash to our accounts once the field is up and running. Thinking more on the deal, the more I think about it, the more I like it!

This part from the Killik note stands out:

"It is anticipated that the cash flow will be sufficient to repay the financing of this deal will be a rapid tow years and increase Sterling Energys reportable group cash flow from 20 million to nearly 60 million by 2006. On less than 5x 2006 cash flow, the stock is very cheap."

Well, I'm back from my seawallwalk, and it's good to see that we are all collectively coming up with the goods on this deal.

It is quite clear any one who dropped out has made a faux pas, and good luck to them with their other investments, I hope thay are able to earn as well as us.

25p to 30p a share short term will do nicely, and did I read the placing is going to be 19p, or did I misunderstand???

Whatever, it is a great deal, with the prospects of more to come.

The optomism is ooozing from this board.

I can not free up any more cash before the off so I will have to sit on the holding I have.

SWW

I thought 17p. Like you I'm fully invested so will just have to wait for one for one of the others to show a bit more profit. But by then I'll probably have missed the boat.
Great steak meal last night. Thanks for the advice on how to cook them. All washed down with lots of champers and G&T's. Rock 'n' Rolled the night away with Elvis, Jerry Lee and the best rock & roll singer of all time Little Richard imho.

MS

Good Golly................

Sounds like you had a great evening, the pair of you.

Just gpone back an d19p is mentioned about 5 items before my last.

Speculation of course.

I am up to the hilt now and need to free some for this and others, but if i miss the boat, okay!

I note on the motley fool, some punters are not so happy.

And one on iii.

This is a share with high risk, but then hasn't it always had some?

The main risk is to the Governement of Mauritannia, but even if that changed, who believes the new, (or any), Governement can get the oil out of the ground themselves?

I don't.

I will see this one through to all of the various points along the way.

Each is a bail point, but this is not one yet.

I will study the full deal when it becomes public and make decisions based on that, not rumour and speculation.

I agree. If you want safe then stick with the FT100 utilities AWG for instance.
Pays a good dividend but so boring. It's all a risk you just have to make a judgment and go for it.
In a couple of years or so we will all be looking back at today's price and counting our blessings whilst sipping large G&T's on some beach in the Bahama's.
That's if you hang on in. Am I ramping or what!

LOL

MS

No ramping at all.

It is your opinion, and mine, plus a few others, i.e. gav and prop. (I know there are others, so sorry if I don't remember as I write).

We all think this is a value share with the potetial to make us huge amounts of cash, but we are also realists.

FTSE100 is fine, but I have not made much on those and in fact as with BB. and RTO, my assets have gone backwards, (thanks to my mate who gave me inside information that they were going to be taken over imminently, 18 months ago).

If it were not for these smaller companies, I would be deeply in the red. As it is, I have made and taken money at various points in the past, perhaps more so as I have learn't the buy in prices and sell out prices along the way. With smaller stock I buy more and make more.

Sterling is one that I have always kept from the Fusion takeoever last year.

Yes there is risk, but there is more risk of something dire when you cross the road, so I intend to make the most of the Oil Minnows.

If it goes wrong, hey, it's only money!!

My missus can keep you company at Kings Cross at a halfpenny a time, so she can keep me in the life style that I have become accustomed too!

If it goes right, she can retire early with me.

That is the long and short of it!