QuickView: Company snapshot
Sterling Energy’s $117m cash appears markedly under-represented in its market cap of £39m ($62m). Against this cash the group has $30m (£19m) of commitments, a $22.7m (£14.19m) abandonment liability for the Chinguetti field in Mauritania, and a further $8m (£5m) of potential staged payments in Somaliland. Post these commitments, the stock remains at a discount to cash, with no value ascribed to the current asset portfolio, or indeed, any ‘option value’, as management has the cash to carry out deals in what most see as a buyers’ market.Sterling Energy, together with its subsidiary is an upstream oil and gas company. Co. is an operator of exploration and production licenses, with a primary geographic focus on Africa. Co. is primarily focused on the development of its Somaliland Odewayne block, and Mauritania C-10 exploration block. Co. holds 40% working interest in the Somaliland Odewayne exploration block. This unexplored frontier acreage position comprises an area of 22,840 sq. km. Co. holds 13.5% working interest in the Mauritania C-10 exploration block. Block C-10 covers an area of approximately 8,025 sq. km. As of Dec 31 2016, Co. had a total proven plus probable oil reserves of 73,000 barrels of oil equivalent.
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