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Press release from CNW Group

Sterling Resources Announces Successful Completion of Senior Secured Bond Issue

Wednesday, April 17, 2013

Sterling Resources Announces Successful Completion of Senior Secured Bond Issue

02:00 EDT Wednesday, April 17, 2013

CALGARY, April 17, 2013 /CNW/ - Sterling Resources Ltd. (TSX-V: SLG) ("Sterling" or the "Company") is pleased to announce the successful placing of the USD 225 million senior secured bond issue (the "Bond") issued by its UK subsidiary Sterling Resources (UK) Ltd (the "Issuer").

The net proceeds of USD 218.6 million from the Bond will be used (i) to prepay the entire senior secured credit facility with a group of lending banks (approximately USD 140 million), (ii) towards funding ongoing development costs of the Breagh field, including development of the eastern portion of the field (Phase 2), (iii) to prefund the first interest payment due October 2013, and (iv) for general corporate purposes (USD 20 million). The Bond has a wide-ranging security package including a charge over the Issuer's interest in the Breagh and Cladhan fields and the shares of the Issuer, as well as a parent company guarantee.

Pareto Securities has acted as Sole Manager and Bookrunner of the Bond issue.

The settlement date for the Bond is expected to be April 30, 2013 (the "Settlement Date"). The Bond has a tenor of six years, and matures on April 30, 2019 based on the estimated Settlement Date. The Bond carries an interest coupon of 9.0 percent payable semi-annually and is callable at the option of the Issuer at any time with a call premium of 105 percent for the first three years and a roll-up of outstanding interest for the first two years. Commencing 18 months after the Settlement Date, the Bond will amortize 10 percent of the issue amount every six months, securing a rapid deleveraging of Sterling in coming years. The amortizations will be performed at a price of 105 percent of par value except for the final installment which shall be repaid at 100 percent of par value. An application will be made for the Bond to be listed on the Oslo Stock Exchange or the Nordic ABM (Oslo). The Bond is governed under Norwegian Law and the trustee for the Bond is Norsk Tillitsmann ASA.

As part of the Bond, the Issuer has undertaken to complete the Cladhan farm-down transaction with TAQA Bratani Limited, as further described in the Company's press release dated April 8, 2013.

Commenting on the successful placing of the Bond, Mike Azancot, Sterling's President and CEO, said: "Following on from our equity raise completed earlier this year, the proceeds from the Bond and the Cladhan farm-down leaves Sterling as a soundly-financed company. The Bond enables us to fully refinance our senior secured credit facility and provides sufficient additional capital to fund future expenditures for Breagh.  In addition, the Bond provides the Company with accelerated access to Breagh cashflow, allowing us to continue our strategy in a financially disciplined manner. We now look forward to achieving first production on Breagh during August 2013, which will be a further transformational milestone for the Company."

Sterling is a Canadian-listed international oil and gas company headquartered in Calgary, Alberta with assets in the United Kingdom, Romania, France and the Netherlands. The common shares are listed and posted for trading on the TSX-V under the symbol "SLG".

Neither the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.

Filer Profile No. 00002072

Forward-Looking Statements

All statements included in this press release that address activities, events or developments that Sterling expects, believes or anticipates will or may occur in the future are forward-looking statements. In addition, statements relating to reserves or resources are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves and resources described can be profitably produced in the future.

These forward-looking statements involve numerous assumptions made by Sterling based on its experience, perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances.  In addition, these statements involve substantial known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other-forward looking statements will prove inaccurate, certain of which are beyond Sterling's control, including: the impact of general economic conditions in the areas in which Sterling operates, civil unrest, industry conditions, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities. In addition there are risks and uncertainties associated with oil and gas operations.  Readers should also carefully consider the matters discussed under the heading "Risk Factors" in the Company's Annual Information Form.

Undue reliance should not be placed on these forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur.  Sterling's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements.  These statements speak only as of the date of the press release. Sterling does not intend and does not assume any obligation to update these forward-looking statements except as required by law.

Financial outlook information contained in this press release about prospective results of operations, financial position or cash flows is based on assumptions about future events, including economic conditions and proposed courses of action, based on management's assessment of the relevant information currently available.  Readers are cautioned that such financial outlook information contained in this press release should not be used for purpose other than for which it is disclosed herein.


SOURCE: Sterling Resources Ltd.

For further information:

visit www.sterling-resources.com or contact:

Mike Azancot, President and Chief Executive Officer, Phone: 44-20-3008-8488, Mobile: 44-7740-432883, mike.azancot@sterling-resources.com

David Blewden, Chief Financial Officer, Phone: 44-20-3008-8488, Mobile: 44-7771-740804, david.blewden@sterling-resources.com

George Kesteven, Manager, Corporate and Investor Relations, Phone: (403) 215-9265, Mobile: (403) 519-3912, george.kesteven@sterling-resources.com

Pareto Securities Fixed Income Sales Desk: +47 22 87 87 70

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