PSC Termination:

Under the terms of the PSC, Sterling and Addax must notify the Kurdistan Regional Government of Iraq (KRG) on or before 31 January 2013 whether the partnership intends to drill a further exploration well on the Sangaw North block before the end of the current exploration phase which runs to November 2013. If Sterling and Addax elect not to drill, then the PSC will terminate on the earlier of the date upon which the partnership notifies the KRG of such election or 1 February 2013.

On 29 January 2013, Sterling notified the KRG of the partnership’s decision not to drill a second exploration well in the Sangaw North PSC area and the PSC automatically terminated on that date.

The partnership has satisfied the work commitment required by the Sangaw North PSC and Sterling will now proceed, over the coming months, to close its remaining operations relating to Sangaw North. Following the closure of these operations, Sterling will have no remaining interests in Kurdistan.