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

From Oilb.


25.04.2006
Sterling Energy Full Of Optimism For The Year Ahead With Production Back On Track In The US And Chinguetti Onstream Offshore Mauritania
2005 was a bumper year for Sterling Energy, which saw turnover climb by 19 per cent to 13.6 million. Post-tax profits came in at 3 million. The AIM-quoted company saw production climb 4 per cent to 9.7 million cubic feet of gas per day, a number which would have been higher if not for the impact of the Gulf of Mexico hurricanes on its production base there.

The company believes this year is shaping up to be even better. The Chinguetti oilfield offshore Mauritania, in which Sterling has the equivalent of an 8 per cent economic interest plus a 5.28 per cent production-based royalty, is now in production and should be pumping 75,000 barrels of oil per day gross later this year. Taken together, these interests will yield substantial cash flow and mark a step-change in Sterling's development.

Added to this, its producing assets in the US are now back online after the hurricane disruption of last year. Over the early months of 2006, production has dipped again because of natural declines, equipment shortages and some post-hurricane restoration work but the newly hooked-up Galveston Bay 251-5 and Gryphon C-3 wells will contribute an additional 2.2 million cf/d to the books this year. Sterling operates 8 fields, 21 offshore structures, over 68 miles of pipelines, five compressor stations and two onshore storage facilities in the US. Rising costs in the Gulf, including higher insurance premiums in the wake of last years devastating hurricanes (up by 250 per cent for Sterling), has prompted the company to look inland for new investment opportunities in the region.

Looking further ahead the production profile will get a boost should the Tevet, Labeidna and Tiof (Oualata) discoveries offshore Mauritania get the development greenlight, which could unlock a further 400 million barrels gross. Sterling would benefit from these developments via its production royalty agreement, which gives the company a slug of the production with no cost to the company. This royalty agreements means Sterling receives a cash bonus of US$1-2 million for each development approved over 50 million barrels plus a sliding scale royalty that depends on the oil price and whether the state oil firm, Societe Mauritanienne Des Hydrocarbures, backs in for its 12 per cent of the project. In this case of Chinguetti, this royalty calculation worked out at 5.28 per cent.

However, Sterling is likely to seek greater exposure to future Mauritania developments by repeating the funding deal it struck with SMH for Chinguetti. The company raised cash on the UK equity market in order to provide the Mauritanian government with the cash it needs to fund its share of the Chinguetti field development costs and in return was awarded what amounts to an 8 per cent economic interest in the field. This was quite a coup for the AIM firm but this time round Sterling is likely to face more competition as other firms will be keen to shake hands with the oil authorities in this newest producing nation.

Sterling hopes to be well placed in this competition, however, because of its close relationship with SMH. Sterling has opened an office in the Mauritanian capital, Nouakchott, and has been providing the state firm with technical, commercial and financial support. Several SMH personnel have been seconded to the Sterling offices in the UK.

The company has an active exploration programme lined up for the year ahead to find the next Chinguettis, with at least five wells due in Africa, seismic work offshore Madagascar and field studies underway for an exploration block in the Kurdish region of Iraq, described by chief executive Harry Wilson as vastly under-explored region with huge potential.

First however the company needs to turn its MoU into a PSC and investors will rightly view any work in that country as high risk in the current security and political environment. For now, investors will be keen to increased output from its bread and butter business in the US while the groundwork for the next step change in Sterlings production and cash flows is laid in Mauritania and, further down the road, elsewhere in Africa.

andy look at pvr

Finally it's started to move. Volume passed 10M ..........

7.6 mil sells 2.4 mil buys, are these trade on virt-x? must be some other buying activity around to build the price.
Maybe AMVESCAP have left an open order on to mop up any surplus stock.
Are these on L2 anyone?

optomistic,

Don't pay too much attention to the buy and sell columns, they are indicative only, and frequently wrong, particularly on a fast moving high volume share.

As long as the price increases, I ignore the trades on SEY.

My home pc down today, shame I had to miss the excitement!

6 million of the shares traded today were in two lots of 2 million and two lots of 1 million. All appeared as sells, but the close timing and identical prices make me think that these were rollovers - they certainly had no effect on the share price. Take these 6 million out of the sell column and a much different picture of the day's trade emerges. Onwards and upwards by the looks of things. Sorry for out long term holder friends who have sold out.

cashed in at 28.09p. it has been a good investment for me over last 20 months, Gordon Brown should do well out of me unless I get a few dogs later in year.
Thanks to Prop and the other oilies forteaching this old engineering dog a few different options from my traditional portfolio.
Will wait a little and ponder when to rejoin SEY.
Good luck to all who still sail in her.

i'm getting emotional...i still have some lft to tip out above 30!

Looks like I'll have the thread to myself before too long then.

sunray41,

Thanks, good luck to you too!

But 20 months?

You were only 4 months away from maximum BATR, and a significant saving in CGT!
(Depending on the size of your holding of course!)

Pond life,

No you won't, I have absolutely no intention of selling SEY, for the time being at least, (news permitting of course).

I intend to wait for Madagascar.

Personally, I think the party has only just started.

my kids love that film..

:-)

Good to buy at 28.25p IMO

Holding up well today when everything else I have is a deep shade of red. Profit takers at work - but not for SEY. A good sign in my view.

pond life,

I agree, poor day all round today, except SEY, and FUM, where rumours of a deal have been circulating for a while.

Interesting to note SEYhave brought 2 new wells online in the GOM, and no RNS!

They are providing 2mmcfged increase, so a fairly substantial increase in GOM production.

I take it that you have seen this from the Hardman RNS's today?

"Operating cash flows from Chinguetti are presently strong, notwithstanding that
production levels are currently below oil facilities capacity. As noted in the
Company's quarterly report dated 21 April 2006, production averaged 60 kbopd
(gross) for the first half of April 2006 and has averaged around 50 kbopd
(gross) for the subsequent period 16 April to 25 April 2006. The reduction is
due principally to lower deliverability from the northern wells. This will not
be compensated by over producing from the southern wells, which would likely
cause gas and water handling issues. Production is not expected to increase
significantly from this present level until well intervention and / or
additional drilling takes place, which is anticipated towards the end of the
third quarter of 2006 or beginning of the fourth quarter 2006."

Not wonderful news but not the only reason for the placing.

Obviously this will signifcantly affect Sterling's royalties from the GOM and PMO.

Does not seem to have registered with the Market yet as there is still strong buying of SEY.

Probably a good time to be increasing their output of gas from the Gulf just now, kind of counter balances the oil shortfall to some degree.

There, told you I would continue to post as and where.

Thanks SWW. Appreciated by those of us still in. Yes the short term impact on revenue will be real but there doesn't seem to be any suggestion that total reserves are not still as expected, which is good news.

Andy - thanks for observation. It is not as bad as it seems as I had 8 top-ups on top of the original buy. I will be out of UK quite a bit over next 5 months and SEY was not one that I wanted to leave unattended.
However it is on the watchlist - could be a rebuy if attractive.
Good luck thanks for your informtive posts.

Sunray41,

Thanks, I agree if you are going to be away, you have to be careful.


SWW,

Thanks, not such good news there from Hardman, and now the reason for the placing becomes apparent.

Not sure that will knock too much, if anything off SEY, as there seems to be a good possibility it will be sorted within a fairly short timeframe.