Placing raises GBP 5 million

Sterling Energy PLC
23 December 2002



The Directors of Sterling Energy plc ('Sterling' or the 'Company') are delighted
to announce that the Company has today entered into an agreement to raise
£5million through a placing of 90,910,000 ordinary shares of 1p each ('Placing
Shares') at a price of 5.5p per share (the 'Placing').  The Placing has been
underwritten by Evolution Beeson Gregory Limited. The proceeds of the Placing,
net of expenses, are approximately £4.75 million and will be used by the Company
to enhance the company's exploration, appraisal and drilling programme, thus
building its portfolio of reserves and prospects quicker.



The Placing Shares represent approximately 26% of the Company's enlarged issued
share capital.  Application has been made for the Placing Shares to be admitted
to trading on AIM and dealings are expected to commence tomorrow, 24 December.



Information on Sterling



Shares in Sterling started trading on AIM in October at 4p, following its
reverse takeover and a successful £2.4 million placing and open offer.



Sterling has a portfolio of five cash-flow producing gas fields offshore USA in
the Gulf of Mexico.  Sterling also owns a 100% working interest in a large
exploration license offshore Philippines, with some 600 billion cubic feet of
potential gas reserves, for which it is evaluating the potential for development
through gas-to-liquids technology.



In October 2002, Sterling announced the purchase of a 17.5% working interest in
the Galveston 303 license offshore Texas; it has already paid back its intial
cash cost and is generating cash of around $60,000 per month. Earlier this
month, a successful additional well on a nearby gas field in which Sterling has
a royalty interest, was announced. This was drilled at no cost to Sterling.
Based on current gas prices and production projections, is expected to
contribute over $180,000 per month to Sterling's pre-tax cash flow when
on-stream.



Sterling's strategy is to acquire producing assets in areas neglected by
previous owners, to use its own technical and commercial expertise to unlock
upside value and to develop a portfolio of international exploration and
drilling interests.





For further information contact:

Harry Wilson, Chief Executive, Sterling Energy plc:           01582 462 121
Graeme Thomson, Finance Director, Sterling Energy plc:        01582 462 121
Allan Piper, First City Financial Public Relations:           020 7436 7486
                                                              07050 203 304
Chris Callaway / Rob Collins, Evolution Beeson Gregory:       020 7488 4040








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