| 1P | Proven reserves or in-place quantities depending on the context |
| 1985 Act | the Companies Act 1985, as amended |
| 2006 Act | the Companies Act 2006, as amended |
| 2007 LTIP | the 2007 Long Term Incentive Plan |
| 2D | two dimensional |
| 2P | the sum of Proven and Probable reserves or in-place quantities depending on the context |
| 3D | three dimensional |
| 3P | the sum of Proven, Probable and Possible reserves or in-place quantities depending on the context |
| AIM | Alternative Investment Market of the London Stock Exchange |
| All Staff LTIP | the All Staff Long Term Incentive Plan adopted in 2009 |
| API gravity | an American Petroleum Institute scale for crude oil density |
| Articles | the articles of association of the Company |
| bbl | barrel, equivalent to 42 US gallons of fluid |
| bbl/d | barrel per day |
| bopd | barrel of oil per day |
| boepd | barrel of oil equivalent per day |
| Borrowing Base Facility | the facility made available under the Senior Facility Agreement |
| Bcf | billion cubic feet of gas |
| Board | the Board of Directors of the Company |
| boe | barrel of oil equivalent, a measure of the gas component converted into its equivalence in barrels of oil |
| C | Celsius |
| Capex | capital expenditure |
| CGR | condensate gas ratio |
| Code or City Code | the City Code on Takeovers and Mergers |
| Combined Code | the Combined Code on Corporate Governance |
| Company or Sterling | Sterling Energy PLC |
| Contingent Resources | those quantities of petroleum estimated, as at a given date, to be potentially recoverable from known accumulations by application of development projects but which are not currently considered to be commercially recoverable due to one or more contingencies, Contingent Resources are a class of discovered recoverable resources |
| COS | chance of success |
| CPF | central production facility |
| Darcy | unit of permeability |
| Deg | degrees |
| DST | drill stem test, a method of flow testing a well |
| Directors | the directors of the Company |
| EBITDA | earnings before interest, taxation, depreciation, depletion and amortisation, impairment and pre-licence expenditure |
| EMV | expected monetary value |
| EPF | early production facility |
| ESP | electric submersible pump |
| EUR | economic ultimate recovery |
| farmin & farmout | a transaction under which one party (farmout party) transfers part of its interest to a contract to another party (farmin party) in exchange for a consideration which may comprise the obligation to pay for some of the farmout party costs relating to the contract and a cash sum for past costs incurred by the farmout party |
| FDP | field development plan |
| Firm Placing | the firm placing of shares pursuant to the prospectus dated 4 December 2009 |
| FPSO | Floating, Production, Storage and Offloading vessel |
| FSA | the Financial Services Authority of the United Kingdom |
| G&G | geological and geophysical |
| GIIP | gas initially in place |
| GOC | gas oil contact |
| GOR | gas oil ratio |
| GWC | gas water contact |
| Group | the Company and its subsidiary undertakings |
| H2S | hydrogen sulphide |
| HMRC | Her Majesty's Revenue and Customs |
| HSES | Health, Safety, Environment and Security |
| hydrocarbons | organic compounds of carbon and hydrogen |
| km | kilometre(s) |
| km2 | square kilometres |
| KRG | Kurdistan Regional Government of Iraq |
| lead | indication of a possible exploration prospect |
| London Stock Exchange or LSE | London Stock Exchange plc |
| m | metre(s) |
| mmbbl | million barrels |
| mmstb | million barrels of oil at stock tank conditions |
| mmboe | million barrels of oil equivalent |
| mmcf | million cubic feet of gas |
| mmcfg/d | million cubic feet of gas per day |
| mmcfge/d | million cubic feet of gas equivalent per day |
| mmscf/d | million cubic feet at standard pressure and temperature per day |
| mss | metres sub-sea |
| mTVDss | metres true vertical depth sub-sea |
| NED LTIP | Non Executive Director Long Term Incentive Plan adopted in 2009 |
| NPV | net present value of a series of cash flows |
| Open Offer | the invitation to qualifying shareholders to subscribe for open offer shares pursuant to the prospectus dated 4 December 2009 |
| Opex | operating expenditure |
| Ordinary Shares | Sterling ordinary shares of 40 pence each |
| OWC | oil water contact |
| P90, P50, P10 | 90%, 50% and 10% probabilities respectively that the stated quantities will be equalled or exceeded. The P90, P50 and P10 quantities correspond to the Proved (1P), Proved + Probable (2P) and Proved + Probable + Possible (3P) confidence levels respectively. |
| Panel or Takeover Panel | the Panel on Takeovers and Mergers |
| petroleum | oil, gas, condensate and natural gas liquids |
| Petronas | PC Mauritania I PTY LTD |
| PRMS | Petroleum resource Management System as issued in March 2007 by the Society of Petroleum Engineers et al |
| prospect | a potential sub-surface accumulation of hydrocarbons which has been identified but not drilled |
| Prospective Resources | those quantities of petroleum which are estimated, as at a given date, to be potentially recoverable from undiscovered accumulations |
| psi(a) | pounds per square inch (absolute) |
| PSC | production sharing contract |
| Reserves | reserves are those quantities of petroleum anticipated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions. Reserves must satisfy four criteria; they must be discovered, recoverable, commercial and remaining (as of the evaluation date) based on the development projects applied. Reserves are further categorised in accordance with the level of certainty associated with the estimates and may be sub-classified based on project maturity and/or characterised by development and production status |
| reservoir | a porous and permeable rock capable of containing fluids |
| RF | recovery factor |
| RI | royalty interest |
| RISC | RISC (UK) Limited of Golden Cross House, 8 Duncannon Street, London WC2N 4JF |
| scf | standard cubic feet of gas (measured at 60 degree Fahrenheit and 14.7 psia) |
| seismic | data, obtained using a sound source and receiver, that is processed to provide a representation of a vertical cross-section through the subsurface layers |
| Senior Facility Agreement | $125 million borrowing base facilty agreement dated 26th September 2007 |
| September Placing | the placing of 4,807,315,000 ordinary 1 pence shares at a price of 1.3 pence per share to raise £62.5 million which was completed in September 2009 |
| spud | to commence drilling a well |
| sq km | square kilometre |
| sq mi | square mile |
| stb | stock tank barrel (measured at 60 degree Fahrenheit and 14.7 psia) |
| STOIIP | stock tank oil initially in place |
| subsidiary | a subsidiary undertaking as defined in the 2006 Act |
| Tcf | trillion cubic feet of gas |
| TEA | technical evaluation agreement |
| TVD | true vertical depth |
| United Kingdom or UK | the United Kingdom of Great Britain and Northern Ireland |
| United States or US | The United States of America |
| water-cut | that percentage of total fluid production that is water |
| Working Interest or WI | a company’s equity interest in a project before reduction for royalties or production share owed to others under the applicable fiscal terms |
