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February 16, 2015

Sterling Energy wins approval to extend two Madagascar PSCs

Sterling Energy has secured approval to extend the existing phase of its Ambilobe and Ampasindava blocks, offshore Madagascar, to July 2016.

Sterling Energy has secured approval to extend the existing phase of its Ambilobe and Ampasindava blocks, offshore Madagascar, to July 2016.

The Ambilobe production sharing contract (PSC), which was awarded in 2004, is in the second phase of the exploration period. All minimum work commitments for the existing phase have been completed.

Sterling completed a farm-out agreement with Pura Vida Mauritius in December 2013. Pura Vida carried all costs related with the acquisition of a discretionary 3D seismic programme, up to a maximum of $15m.

"We are pleased to receive approval for the extension of the current periods on both the Ambilobe and Ampasindava Blocks."

Sterling will operate the block with a 50% stake. Pura Vida will hold the remaining 50% interest.

Both companies will continue with planning of the 3D seismic programme, which is expected to start in March 2015.

The Ampasindava PSC, which was also awarded in 2004, is in the third phase of the exploration period.

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Sterling owns a 30% non-operated working interest in the block. ExxonMobil Exploration and Production (Northern Madagascar) operates it with a 70% working interest.

Both companies have signed a farm-in agreement in 2005, ensuring that Sterling’s share of exploration costs in the block is carried up to a fixed gross amount.

Sterling Energy executive chairman Alastair Beardsall said: "We are pleased to receive approval for the extension of the current periods on both the Ambilobe and Ampasindava Blocks.

"Work continues on understanding the sub-surface potential of these two very large, undrilled exploration areas.”

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