News

March 10, 2009

Credit Crunch Bites Sterling Energy As It Continues To Seek Buyers For US Assets

Shares in Sterling Energy took another tumble on Monday when the AIM-quoted firm revealed a funding gap of US$28 million after its syndicated debt facility was trimmed to reflect the fall in energy prices. The news came as the lead bank in the syndicate, Natixis, cautioned that Sterling’s borrowing base would be US$76 million, giving rise to a debt gap of US$28 million.

Sterling, which produces around 5,000 barrels of oil equivalent per day, is now seeking a waiver on its repayments until mid-August to enable it to bring its borrowings into line with the reduced borrowing base. The AIM firm, which has current cash resources of US$7 million, said it was in “advanced discussions” with its syndicate of banks and expected to reach agreement to provide “sufficient headroom” to enable the company to service its existing cash flow obligations.
 
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