28 July 2016

Sterling Energy plc

Results for the six months ending 30 June 2016

Sterling Energy plc ('Sterling' or the 'Company'), together with its subsidiary undertakings (the 'Group'), an upstream oil and gas company listed on the AIM market of the London Stock Exchange (Ticker Symbol: SEY) today announces its results for the six month period ending 30 June 2016.

Sterling is an experienced operator of international licences, with a primary focus on Africa. The Group has high potential exploration projects in Mauritania, Somaliland and Cameroon together with a production interest in Mauritania.

Financial summary

• Cash as at 30 June 2016 of $92.5 million ($92.4 million net of partner funds), no debt.

• Group turnover of $1.3 million (1H 2015: $3.6 million).

• Loss after tax of $8.2 million (1H 2015: loss $1.5 million).

• Average net Group entitlement to production of 214 bopd (1H 2015: 358 bopd).

• Adjusted EBITDAX loss of $1.7 million (1H 2015: loss $1.5 million).

  Operations summary

• Recent production performance for the Chinguetti field, offshore Mauritania has been consistent with the operator's projected 2016 forecast. The depressed oil price continues to have an onerous impact on the Chinguetti project and future joint venture economics. Discussions continue amongst respective stakeholders with the objective to execute an agreed and effective field decommissioning plan, following cessation of production, which is currently envisaged to be in late 2016/ early 2017.

• In Mauritania, block C-10, the joint venture have been maturing the prospect and lead inventory to inform the selection of a drilling candidate to meet the well commitment due by November 2017. Work has focused on the range of play types present within C-10 and in particular developing the Cenomanian play proven by Kosmos Energy in their deepwater Mauritanian acreage.

• In Somaliland, Sterling's interest in the large onshore Odewayne PSC block is carried by Genel Energy Somaliland Limited ('Genel') for all exploration costs during the current third, and subsequent fourth exploration period. The joint venture plans to acquire 2D seismic data in late 2016, early 2017.

• In Mauritania, Sterling completed its withdrawal from the C-3 Block, effective 16 March 2016.

• In Madagascar, Sterling completed its withdrawal from the Ambilobe Block, effective 9 May 2016.

• In Cameroon, on the Ntem block, given the lack of progress with SNH and the declaration of force majeure, forward plans on the block are currently under review.

  Corporate summary

• On 11 May 2016 the Company announced that its Executive Chairman Alastair Beardsall would be retiring from the Company with immediate effect after six years of service for personal reasons.

• On 11 May 2016 Nicholas Clayton, who joined the Sterling Energy board as a Non-Executive Director in October 2009, was appointed by the Board to succeed Mr Beardsall in the position of Non-Executive Chairman.

• On 11 May 2016, the Company appointed Mr Michael Kroupeev as a Non-Executive Director of Sterling Energy.

• On 25 April 2016, the Company held its 2016 Annual General Meeting at which all shareholder resolutions were passed.

For further information contact:

Sterling Energy plc +44 (0)20 7405 4133

Eskil Jersing, CEO

Nicholas Clayton, Non-Executive Chairman

www.sterlingenergyplc.com

Peel Hunt LLP +44 (0)20 7418 8900

Richard Crichton Ross Allister

CEO Statement

Through the first six months of 2016 we have continued to actively manage our exploration portfolio whilst controlling our costs and liability exposure. In parallel we have continued to focus on near term revenue generating growth opportunities, through comprehensive and focused M&A driven due diligence efforts, with the aim of securing value accretive asset(s) in 2016. This is in contrast to our 2015 efforts to refresh and enhance the portfolio value through a primarily exploration driven agenda.

The 'lower for longer' commodity price landscape continues through 2016 and is clearly not conducive to E&P players seeking carried funding through the exploration phase of project life cycles. Fewer buyers are interested in pure exploration assets with 5 plus years to monetisation, with limited M&A deals executing in this space over the last 18 months. In essence, this legacy pure exploration biased E&P model is flawed for most, bar those players with high quality executable assets and balance sheets. Partly as a result, we see a sector that in aggregate runs in cash deficit mode, with a continuing need to raise money from asset sales, share and bond issues and bank borrowing to finance capital spending.

The AIM E&P sector in particular continues to be over endowed with marginal asset positions, weak balance sheets and low trading liquidity. Sterling, however, have maintained our discipline through the downturn, with a strong balance sheet, no debt and fully funded on outstanding commitments and liabilities.

We have proactively continued our portfolio re-alignment mandate, shedding those marginal assets (at little to no cost to Sterling) with limited near to mid-term monetisation options, allowing us an effective and focused platform for growth, with an exploitation asset bias.

On the Chinguetti field, we continue to diligently work with Société Mauritanienne Des Hydrocarbures et de Patrimoine Minier ('SMHPM'), the Mauritanian National Oil Company, and the joint venture ('JV') partnership, operated by Petronas; to execute both a safe and cost effective Abandonment and Decommissioning plan for the field. Cessation of production is currently scheduled for late 2016/ early 2017, with well abandonment and FPSO decommissioning operations following directly thereafter.

The C-3 block (Mauritania) and Ambilobe (Madagascar) exit decisions were both data driven and based on disciplined technical and commercial rationale. In block C-3, we completed a full technical evaluation of the acreage in early Q1, on the newly acquired 2D seismic data. This enabled us to take a view that the 2D data had insufficiently de-risked the remaining play and lead potential to justify committing to a 3D seismic survey and the drilling of 1 well. In Ambilobe, we fully evaluated our 2015 operated deep water 3D seismic survey and concluded that there was insufficient evidence to suggest the presence of commercially viable drill-worthy opportunities left on the block.

We have however, been encouraged by the material scope and exploration potential on our C-10 and Odewayne blocks in Mauritania and Somaliland respectively.

On C-10 we continue to technically de-risk and high grade the lead and prospect portfolio, prioritising the Cenomanian play, analogous to recent outboard Kosmos world class LNG scale gas discoveries in this premier emerging oil and gas province. Our aim will be to make a decision on the highest ranking drill-worthy prospect by end Q3 2016, leading to a 2017 exploration well by the JV partnership.

Furthermore, in Odewayne we look forwards to the joint venture acquiring regional 2D seismic data in late 2016/ early 2017. This block-wide data set, for which the Company is fully carried, will significantly assist in our understanding of the petroleum system of this frontier sedimentary basin with a view to planning for a first well in 2018.

In summary, we continue to see a strong M&A (both asset led and corporate) opportunity window, for Sterling to take advantage of by virtue of: a) our strong balance sheet, b) lower entry costs and commitments, c) deflated contractor costs in a distressed landscape, d) the opportunity to leverage the requisite technology and capabilities to convert 2C resources to 2P reserves, and e) the potential benefits from an improvement in oil prices; all combining to provide a compelling and transformative value proposition to our shareholders in this depressed market.

As such, a prudent, selective and persistent effort continues to move away from mid to long-cycle (to monetisation) exploration led assets, towards much shorter-cycle (onshore/shallow water) revenue generating projects (through M&A) that can deliver transformative value to Sterling, at or below oil prices of $50 flat, both in Africa and beyond.

Eskil Jersing CEO

28 July 2016

Operations Review

Mauritania

PSC C-10 (WI 13.5%) Exploration block

Block C-10 covers an area of approximately 8,025km² and lies in water depths of 50 to 2,400m within the Nouakchott sub-basin, offshore Mauritania, surrounding the Chinguetti field. The C-10 block PSC is held by the Company's wholly owned subsidiary Sterling Energy Mauritania Limited ('SEML') (13.5% working interest), Tullow Oil (76.5% working interest and operator) and SMHPM (10% working interest). SMHPM is carried by SEML and Tullow Oil, pro-rata to their working interests, during the exploration phases. The PSC is in the second phase of the exploration period, which is due to expire on 30 November 2017 and has a minimum work obligation of one exploration well. Should the JV not fulfil the minimum work obligations, the gross liability owing to the Mauritanian government would be $7.5 million ($1.1 million net to SEML). Following the completion of Phase 2 the JV may elect to enter into Phase 3 (with a 3 year term) with a minimum work obligation of a further two exploration wells.

The block is 85% covered by legacy 3D seismic coverage and lies within a proven petroleum basin offering exposure to multiple play-types from under-explored Jurassic and lower Cretaceous shelfal carbonates to Cretaceous (Cenomanian age) and Tertiary clastic plays. Within the block confines a successful exploration campaign in 2000-2003 targeting the Miocene play, yielded four oil and gas discoveries, including the Chinguetti oil field and the Banda, Tiof and Tevet gas discoveries.

Since 2014, Kosmos Energy, immediately outboard of C-10, has discovered and appraised several world class LNG scale gas discoveries of Albian to Cenomanian age. The Tortue (Ahmeyim), Marsouin and Teranga discoveries within a deepwater reservoir fairway have alone been reported to contain gross Pmean gas resources upwards of 25 Tcf. Further south in Senegal, the Albian clastic shelf margin play has been successfully appraised at SNE where Cairn Energy and partners are moving towards commercial development, with Woodside's acquisition of ConocoPhillip's 35 percent interest and development operator option in the reported 560 million barrel oil field recently announced. Sterling is primarily focused on both quantifying and risk mitigating the liquids prone part of the Cenomanian play that is interpreted to impinge into the NW part of block C-10.

Following entry into the C-10 block in mid-2015, Sterling and its JV partners have been maturing and ranking the prospect and lead portfolio on the extensive 3D seismic dataset. The JV is working towards selecting by the end of Q4 2016, a material exploration prospect for drilling in 2017 by end Q4 2016, to meet the minimum work obligations.

PSC C-3

Block C-3 is located in shallow water within the Nouakchott sub-basin, offshore Mauritania and covers an area of 9,825km².

On 29 January 2016 SEML announced that it had submitted a notice of withdrawal to its JV partners in relation to Block C-3. As part of the withdrawal, SEML assigned its entire 40.5% participating interest in the production sharing contract for Block C-3 to Tullow Oil. The withdrawal was completed on 16 March 2016.

Chinguetti oil field (ca. 9% economic interest)

The Company has an economic interest in the Chinguetti field via a Funding Agreement with SMHPM and a Royalty Agreement with Premier within the Group, together currently equivalent to 4.9% of production; the average daily production during 1H 2016 was 4,395 bopd gross (214 bopd net entitlement to Sterling). Economic rights are transferred to the seller on the completion of each cargo lifting and two cargoes were sold in the period; liftings were completed in both January 2016 and May 2016. Discussions continue between the Joint Venture stakeholders with the objective to execute an agreed and effective field decommissioning plan.

Somaliland

Odewayne (WI 40%) Exploration block

This large, unexplored frontier acreage position comprises an area of 22,840km2. Exploration to date has been limited to the acquisition of airborne gravity and magnetic data, which has given strong encouragement of the presence of a sedimentary basin deep enough to support hydrocarbon generation. Geological fieldwork has highlighted the presence of oil seeps at the surface further supporting the hypothesis that a working hydrocarbon system is present.

The Odewayne production sharing agreement ('PSA') was awarded in 2005, and is in the Third Period with an outstanding minimum work obligation of 500km of 2D seismic. The Third Period was extended by two years (to 2 November 2016) in order to allow time for an Oilfield Protection Unit ('OPU') to be established to support future seismic acquisition. The minimum work obligation during the Fourth Period of the PSA (also extended by 2 years to May 2018) is for 1,000km of 2D seismic and one exploration well.