1

22 July 2011

Sangaw North-1 exploration well in Kurdistan drilled to total depth of 4,190m; flow tests recovered

hydrocarbons at non-commercial rates.

Average net Group production decreased by 8% to 626 bopd (H1 2010: 681 bopd).

Group turnover decreased 22% to $9.5 million (H1 2010: $12.2 million).

Profit after tax of $6.5 million (H1 2010: profit of $0.1 million).

Cash flow from operations of $5.8 million (H1 2010: $3.8 million).

Cash as at 30 June 2011 of $113.4 million ($100.1 million net of partner funds), no debt.

In the Sangaw North block, onshore Kurdistan, an integrated interpretation of the 2D seismic and the

data acquired during the Sangaw North-1 well operations will be conducted to determine the

potential of the block prior to recommendations to the joint venture group on future activity.

In the Ntem concession, a large block offshore Cameroon containing four material prospects, farm

out activities have been progressed and the Company is in final discussions with interested parties.

The block remains in force majeure awaiting the resolution of the maritime border dispute between

Cameroon and Equatorial Guinea.

The large Sifaka prospect in the Ampasindava block, offshore Madagascar, is ready to drill and

Sterling awaits confirmation from ExxonMobil on the expected timing for the exploration well.

In the Ambilobe block, offshore Madagascar, Sterling is continuing discussion with OMNIS, the state

regulator, with regard to the extension of the exploration period of the licence.

In the Chinguetti field, offshore Mauritania, production is declining at a significantly lower rate than

previously observed supporting a field abandonment date over five years in the future given the

current oil price environment.