Drilling Report

Sterling Energy PLC
21 December 2004


Sterling Energy plc advises that the following announcement was made earlier
today by Woodside Petroleum Limited:



'Woodside Mauritania Pty Ltd, a wholly-owned subsidiary of Woodside Petroleum
Ltd., reports the following activity offshore Mauritania since the last report
issued on 14 December 2004.

                                 PSC-B, Block 4
                    Tiof-5 and Chinguetti Development wells

Tiof-5 Appraisal well

Following the completion of wireline logging operations, the Tiof-5 appraisal
well was plugged and abandoned as planned. On 17 December 2004, the 'Stena Tay'
drill rig moved to the Chinguetti Field to join the 'West Navigator' on the
development drilling program.

Chinguetti Development wells The 'West Navigator' and the 'Stena Tay' are
currently conducting operations on Chinguetti Development wells. Woodside does
not plan to issue announcements regarding operations on Chinguetti Development
wells, but will do so if necessary in order to comply with its continuous
disclosure obligations under the ASX Listing Rules.

All reported drilling depths are referenced to the rig rotary table and all
times are Universal Time (UTC) (Mauritanian time).

The locations of the Chinguetti Oil Field, the Tiof and Banda discoveries and
exploration wells are shown on the attached map.*

Wells are expected to be drilled in two production sharing contract areas during
the remainder of the 2004/5 campaign.'

Participating Interests in the areas are:

          +-----------------------------------+-----------+----------+
          |              Company              |   PSC-A   |  PSC-B   |
          +-----------------------------------+-----------+----------+
          |Woodside group companies (Operator)|  53.846%  | 53.846%  |
          +-----------------------------------+-----------+----------+
          |Hardman group companies            |   24.3%   |  21.6%   |
          +-----------------------------------+-----------+----------+
          |BG group companies                 |  13.084%  |  11.63%  |
          +-----------------------------------+-----------+----------+
          |Premier group companies            |    --     |  9.231%  |
          +-----------------------------------+-----------+----------+
          |Fusion group companies             |  4. 615%  |    --    |
          +-----------------------------------+-----------+----------+
          |Roc Oil group companies            |  4.155%   |  3.693%  |
          +-----------------------------------+-----------+----------

Sterling owns a royalty right over a 6% interest in PSC B, save for Chinguetti,
where the royalty right is 5.28%. It will hold a royalty right over a 3%
interest in PSC A following a Declaration of Commerciality in PSC A. This is as
a result of the transaction between Fusion Oil & Gas and Premier Oil, announced
on 28 May 2003, and Sterling's subsequent takeover of Fusion.

Through a funding agreement with the Mauritanian government, announced last
month, Sterling also has a further interest in the Chinguetti development.




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