Sterling Energy

Glossary

Key Terms

$

US Dollars

1P

proven reserves (both proved developed reserves + proved undeveloped reserves)

2D

two dimensional

2P

1P (proven reserves) + probable reserves, hence "proved AND probable."

3D

three dimensional

3P

the sum of 2P (proven reserves + probable reserves) + possible reserves, all 3Ps "proven AND probable AND possible."

A&D

abandonment and decommissioning

AIM

AIM, a SME Growth market of the London Stock Exchange

All Staff LTIP

the All Staff Long Term Incentive Plan adopted in 2009

AGM

Annual General Meeting

Articles

the Articles of Association of the Company

bbl

barrel, equivalent to 42 US gallons of fluid

bopd

barrel of oil per day

boe

barrel of oil equivalent, a measure of the gas component converted into its equivalence in barrels of oil

Board

the Board of Directors of the Company

City Code

the City Code on Takeovers and Mergers

Companies Act or Companies Act 2006

the Companies Act 2006, as amended 2006

Company

Sterling Energy plc

CoP

cessation of production

CSOP

Company Share Option Plan (HMRC approved share option scheme)

Directors

the Directors of the Company

D&P

development and production assets

E&E

exploration and evaluation assets

E&P

exploration and production

EBITDAX (Adjusted)

earnings before interest, taxation, depreciation, depletion and amortisation, impairment, share-based payments, provisions, and pre-licence expenditure

EITI

Extractive Industries Transparency Initiative

EUR

the total amount of hydrocarbons expected to be produced from the hydrocarbon accumulation over the life of the project. Estimated ultimate recovery is synonymous with recoverable resource and the terms are used interchangeably.

FA

Funding Agreement

Farm-in & farm-out

a transaction under which one party (farm-out party) transfers part of its interest to a contract to another party (farm-in party) in exchange for a consideration which may comprise the obligation to pay for some of the farm-out party costs relating to the contract and a cash sum for past costs incurred by the farm-out party

FCA

Financial Conduct Authority of the United Kingdom

FPSO

Floating, Production, Storage and Offloading vessel

G&A

general and administrative

G&G

geological and geophysical

GBP

pounds sterling

Genel Energy

Genel Energy Somaliland Limited

Group

the Company and its subsidiary undertakings

HMRC

Her Majesty's Revenue and Customs

HMRC Approved Sub-Plan or HMRC Sub-Plan

the HMRC approved sub-plan of the All Staff LTIP

HSSE

Health, Safety, Security and Environment

hydrocarbons

organic compounds of carbon and hydrogen

IAS

International Accounting Standards

IFRS

International Financial Reporting Standards

Index

FTSE 350 Index

Jacka

Jacka Resources Somaliland Limited

JV

joint venture

k

thousands

km

kilometre(s)

km2

square kilometres

KPIs

Key Performance Indicators

lead

indication of a potential exploration prospect

London Stock Exchange or LSE

London Stock Exchange Plc

LTIP

Long-Term Incentive Plan

M&A

merger and acquisition

m

metre(s)

mcf

thousand cubic feet

NED LTIP

Non-executive Director Long Term Incentive Plan adopted in 2009

OECD

Organisation for Economic Cooperation and Development

OPEC

Organisation of the Petroleum Exporting Countries

OPU

Oil Protection Unit

Ordinary Shares

ordinary shares of 10 pence each

P10

the value on a probabilistic distribution which is exceeded by 10% of the outcomes

P50

the value on a probabilistic distribution which is exceeded by 50% of the outcomes. The P50 is also the median value of the distribution.

P90

the value on a probabilistic distribution which is exceeded by 90% of the outcomes

Panel or Takeover Panel

the Panel on Takeovers and Mergers

Petroleum

oil, gas, condensate and natural gas liquids

Petroleum system

geologic components and processes necessary to generate and store hydrocarbons, including a mature source rock, migration pathway, reservoir rock, trap and seal.

Petronas

PC Mauritania 1 PTY LTD

Petrosoma

Petrosoma Limited (JV partner in Somaliland)

Pmean

the average of the values in the probabilistic distribution between defined ‘boundary conditions’. Universally regarded as the best single value to quote or communicate for any uncertain distribution of outcomes involved in repeated trial investigations.

Premier

Premier Oil PLC

Pre Stack Depth Migration

process by which seismic events are geometrically re-located in space and depth to the location the event occurred in the subsurface

Prospect

an area of exploration in which hydrocarbons have been predicted to exist in economic quantity. A group of prospects of a similar nature constitutes a play.

PSA

Production Sharing Agreement

PSC

Production Sharing Contract

Pura Vida

Pura Vida Mauritius

QCA Code

Corporate Governance Code for Small and Mid-Size Quoted Companies

RA

Royalty Agreement

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 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

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

SESP

Sterling Energy plc share price

Shares

10p ordinary shares

Shareholders

ordinary shareholders of 10p each in the Company

SMHPM

Société Mauritanienne Des Hydrocarbures et de Patrimoine Minier (Mauritania’s national oil company)

Subsidiary

a subsidiary undertaking as defined in the 2006 Act

Tcf

trillion cubic feet

TSR

total shareholder return (End Share Price – Opening Share Price/Opening Share Price) plus (Sum of Dividends per Share/Opening Share Price)

Tullow Oil

Tullow Mauritania Limited

United Kingdom or UK

the United Kingdom of Great Britain and Northern Ireland

Waterford Finance and Investment

Waterford Limited

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