SLG San Lorenzo Gold Corp

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CALGARY, Nov. 9, 2017 /CNW/ - Sterling Resources Ltd. ("Sterling") (TSXV: SLG) and PetroTal Ltd. ("PetroTal") are pleased to announce that they have entered into an arrangement agreement dated as of November 9, 2017 (the "Arrangement Agreement") whereby Sterling and PetroTal will complete a business combination pursuant to a plan of arrangement (the "Plan of Arrangement") under the Alberta Business Corporations Act (the "Transaction"). The Plan of Arrangement steps will result in the combination of Sterling and PetroTal under the name Sterling Resources Ltd. ("New Sterling").

New Sterling will be led by the existing management team of PetroTal: Manuel Pablo Zúñiga-Pflucker (President, Chief Executive Officer and Director), Gregory E. Smith (Executive Vice President, Chief Financial Officer and Director), Charles R. Fetzner (Vice President, Asset Development) and Estuardo Alvarez-Calderon (Vice President, Operations).

Upon completion of the Plan of Arrangement, New Sterling's board of directors will be comprised of a combination of representatives from PetroTal (Manuel Pablo Zúñiga-Pflucker, James B. Taylor, and Douglas C. Urch), Sterling (Gavin Wilson and a director yet to be determined) and Gran Tierra Energy Inc. ("GTE") (Gary S. Guidry and Ryan Ellson).

Summary of the Plan of Arrangement and Related Transactions

Pursuant to the Transaction, each common share of PetroTal ("PetroTal Share") will be exchanged for 5.35 common shares of Sterling ("Sterling Shares") and Sterling and PetroTal will be amalgamated to form New Sterling.  The Transaction is expected to constitute a "Reverse Takeover" pursuant to the policies of the TSX Venture Exchange (the "TSXV") and is subject to the acceptance of the TSXV. Sterling is at arms' length to PetroTal. 

In addition, PetroTal has entered into a share purchase agreement dated as of November 9, 2017 (the "SPA") with Sterling, GTE (NYSE MKT: GTE, TSX: GTE), a Delaware corporation, and its wholly owned subsidiary Gran Tierra Energy International Holdings Ltd. ("GTEIH"), to acquire Gran Tierra Energy International (Peru) Holdings B.V. ("GTE Peru"), an indirect wholly-owned subsidiary of GTE. Pursuant to the SPA and in the manner set forth in the Plan of Arrangement, New Sterling shall acquire all of the issued and outstanding common shares in the capital of GTE Peru (the "GTE Peru Shares") and, in consideration for the GTE Peru Shares, New Sterling shall issue 187.25 million common shares of New Sterling ("New Sterling Shares") to GTEIH at a deemed price of approximately USD$0.1869 per New Sterling Share, subject to adjustment in cash as set forth in the SPA (the "Acquisition"). As additional consideration for the transactions contemplated in the SPA, New Sterling will grant GTEIH a 20% working interest in Block 107 at closing of the Acquisition and, following the drilling of an initial exploration well, GTEIH may, for no additional consideration, elect to either retain its 20% working interest (a "Positive Election") or transfer its 20% working interest to New Sterling for no consideration.  From and after the date of a Positive Election, GTEIH will pay its pro rata share of costs associated with its 20% working interest. GTE is at arms' length to PetroTal and Sterling.

In conjunction with the closing of the Transaction, PetroTal has entered into an agreement with a syndicate of investment dealers (the "Agents") co-led by Eight Capital (which is a "member" within the meaning of the TSXV's policies) and Pareto Securities AS (which is not a "member" within the meaning of the TSXV's policies) and including PillarFour Securities Inc. (which is not a "member" within the meaning of the TSXV's policies), for a brokered private placement offering of subscription receipts ("Subscription Receipts") on a best efforts agency basis at a price of USD$1.00 per Subscription Receipt for aggregate gross proceeds of a minimum of USD$25 million (the "Financing"). The Financing is expected to close on or about December 7, 2017.  Each Subscription Receipt will be exchangeable into one PetroTal Share without any further action required on the part of the holder of the Subscription Receipt and without payment of any additional consideration, upon the closing of the Transaction.  The terms of the Financing are outlined below under the heading "Brokered Financing".

Strategic Rationale of the Plan of Arrangement and Related Transactions

Management and the board of directors of each of Sterling and PetroTal believe their respective shareholders will benefit from the following attributes of the Transaction:

• Pure-play Peruvian strategic partnership between Sterling, PetroTal and GTE;
• Pro forma net cash position of approximately USD$40 million⁽¹⁾;
• 100% working interest in Block 95 which includes Bretaña, one of the largest undeveloped discoveries in Peru with 330 MMboe of best estimate discovered oil in place and 39.8 (37.6 net) MMbbl of 2C contingent resources (12% recovery factor⁽²⁾);
• Substantial infrastructure in place at Bretaña, with the ability to deliver first production by Q4 2018 for USD$24 million in anticipated capital expenditure;
• Robust netbacks of USD$24/bbl forecasted⁽³⁾;
• Fully financed to commercial production at Bretaña targeting 5,000 bbl/d in first half of 2019;
• Significant recovery factor upside at Bretaña as analogous fields in Peru have achieved recovery factors of approximately 20% - 40% versus 12% estimated for Bretaña⁽²⁾; and
• Exploration upside potential with seismically defined Block 107 Osheki prospect.

Overview of New Sterling

Corporate Strategy

New Sterling's assets will include the Bretaña oil field on Block 95 (100% working interest), Block 107 (80%-100% working interest, depending on whether GTEIH makes a Positive Election to retain its 20% working interest) and Block 133 (100% working interest), which are located onshore Peru.

Following completion of the Transaction, New Sterling's business plan will be focused on building value through the development and exploration of material oil assets in Peru across its 2.2 million net acres of undeveloped land. New Sterling's immediate focus is to: (i) develop the Bretaña oil field, one of the largest undeveloped discoveries in Peru, by applying management's knowledge and leveraging management's experience with the local suppliers and regulatory bodies; and (ii) secure a farm-in partner to finance the drilling of the large Osheki prospect.

New Sterling's management team has extensive engineering, geological, geophysical, technical, financial and operational experience and valuable knowledge of oil and gas operations throughout Latin America and, in particular, Peru.

Bretaña – Block 95

Based on an independent assessment of contingent resources with respect to GTE's Peruvian exploration and development properties in the Bretaña oil field, located in Block 95 of the Marañón basin of Peru, which was completed by Netherland Sewell & Associates, Inc. ("NSAI"), a qualified reserves evaluator as defined in Canadian National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101"), with an effective date of June 30, 2017 (the "NSAI Contingent Resources Assessment"), and prepared in accordance with the Canadian Oil and Gas Evaluation Handbook and the standards established by NI 51-101, the risked (2C) contingent resources for such properties are:

Exploration Prospects

The initial exploration portfolio consists of the Osheki prospect, located in Block 107. Osheki is a large oil prospect that, if successful, is expected to deliver light sweet crude. The Osheki prospect is anticipated to be part of the same petroleum system as the Los Angeles light oil field located 150 km to the north in the Ucayali Basin and considered to be on trend with the Camisea gas condensate field, with 10.4 TCF of natural gas and 505 MMboe of condensate reserves⁽¹⁾ to the south.  PetroTal intends to seek farm-in partners to finance the drilling of an exploration well targeting the Osheki prospect once the Transaction has been completed.

Information with respect to PetroTal's work program and the Assets will be included in the filing statement to be filed on SEDAR in connection with the Transaction at www.sedar.com.

Financial Information

The table below presents selected financial information for PetroTal on a consolidated basis. Neither PetroTal nor its wholly-owned subsidiary, PetroTal LLC, has conducted active operations since their incorporation.

The table below presents selected financial information for GTE's Peru business on a combined carve-out basis for the year ended December 31, 2016 and for the six month period ended June 30, 2017. 

Information with respect to PetroTal's financial statements and the financial statements of GTE's Peru business will be included in the filing statement to be filed on SEDAR in connection with the Transaction at www.sedar.com, together with pro forma financial statements of Sterling giving effect to the Transaction. 

Brokered Financing

In conjunction with the closing of the Transaction, PetroTal has entered into an agreement with the Agents, for a brokered private placement offering of Subscription Receipts on a best efforts agency basis at a price of USD$1.00 per Subscription Receipt for aggregate gross proceeds of a minimum of USD$25 million. The Financing is expected to close on or about December 7, 2017.  Each Subscription Receipt will be exchangeable into one PetroTal Share without any further action required on the part of the holder of the Subscription Receipt and without payment of any additional consideration, upon the closing of the Transaction. 

The gross proceeds from the Financing will be held in escrow pending the completion of the Transaction, which is expected to close on or around December 11, 2017.  If all conditions to the completion of the Transaction (other than funding) are satisfied on or before December 31, 2017, the net proceeds from the sale of the Subscription Receipts will be released from escrow to PetroTal and each Subscription Receipt will be exchanged for one PetroTal Share.  If the Transaction is not completed on or before December 31, 2017, or is terminated at an earlier time, then the purchase price for the Subscription Receipts will be returned to subscribers, together with a pro rata portion of interest earned on the escrowed funds, if any.

The Agents will be entitled to receive from PetroTal a cash commission equal to 6.0% of the gross proceeds of the Financing upon the release to PetroTal of the escrowed funds on the closing date of the Transaction. In addition, PetroTal will issue warrants to the Agents to purchase such number of Subscription Receipts (or PetroTal Shares, Sterling Shares or Resulting Issuer Shares, as applicable) as is equal to 2.0% of the Subscription Receipts sold pursuant to the Financing.

The Agents have the option to purchase up to an additional 3,750,000 Subscription Receipts, exercisable in whole or in part, at any time up to 48 hours prior to closing of the Transaction, for additional aggregate gross proceeds of up to USD$3.75 million.

The net proceeds of the Financing are expected to be used to fund PetroTal's development program following completion of the Transaction and for general corporate purposes. Completion of the Financing is a condition precedent to the completion of the Transaction.  In the event PetroTal is unable to complete the Financing on satisfactory terms, PetroTal and Sterling will be unable to complete the Transaction.  In that circumstance, Sterling will undertake steps to effect its liquidation and winding up and the distribution of its remaining assets to the Sterling Shareholders as soon as practicable and in the manner previously disclosed to the Sterling Shareholders.

Sterling and PetroTal intend to issue a press release disclosing further information about the Financing once such information is available.

New Sterling Management Team and Board of Directors

Subject to and following the closing of the Transaction, the directors and officers of New Sterling are expected to be the following individuals:

Manuel Pablo Zúñiga-Pflucker, Chief Executive Officer and Director (Houston, Texas, USA)

Manuel Zúñiga is a petroleum engineer with 30 years of industry experience and was a founder and the President and Chief Executive Officer of BPZ Resources, Inc. ("BPZ Resources").  A native Peruvian, Mr. Zúñiga has extensive experience in Peru, as well as other countries in Latin America, and has established relationships with operators and government agencies in country.  Mr. Zuniga holds a Bachelor of Science degree in Mechanical Engineering from the University of Maryland and a Masters of Science degree in Petroleum Engineering from Texas A&M University.

Gregory Smith, Executive Vice President and Chief Financial Officer (Houston, Texas, USA)

Mr. Smith has over 20 years of experience in the oil and gas sector, most recently with Houston based offshore operator Energy XXI and prior to that with BPZ Resources.  Mr. Smith holds a Bachelor of Science degree in Communications from Missouri State University and a Masters in Business Administration from the Mays Business School at Texas A&M University.

Charles Fetzner, Vice President, Asset Development (Houston, Texas, USA)

Charles Fetzner is a geologist with over 35 years of experience managing exploration and development projects throughout the USA, Latin America, East and Southeast Asia, North Africa and the Middle East.  Previously, Mr. Fetzner has held senior roles with BPZ Resources, Sun E&P/Oryx Energy and Apache Corporation.  Mr. Fetzner received a Bachelor of Science degree in Geology from the University of New Hampshire in 1979.

Estuardo Alvarez-Calderon, Vice President, Operations (Houston, Texas, USA and Lima, Peru)

Estuardo Alvarez-Calderon brings more than 35 years of oil and gas experience to New Sterling, 28 of which were with Occidental Petroleum, Americas where he was focused on Latin America & Peru.  While at Occidental, Mr. Alvarez-Calderon worked in most of the basins of Peru, including Marañón (Blocks 1-AB, 4, 54, 64 and 101), Ucayali, Huallaga and Madre de Dios.  Mr. Alvarez-Calderon received a Bachelor of Science degree in Geology from the University of Texas at Austin and is registered on the Texas Board of Professional Geoscientists.

Sony Gill, Corporate Secretary (Calgary, Alberta)

Sanjib (Sony) Gill is a partner in the Business Law Group in the Calgary office of the national law firm McCarthy Tétrault LLP and has extensive experience in all aspects of a public and private company creation, growth, restructuring and value maximization.  Mr. Gill also acts as a corporate secretary for and sits on the board of numerous public and private oil and gas companies.  Mr. Gill is a member of the Law Society of Alberta and the Canadian Bar Association.

James B. Taylor, Director (Santa Fe, New Mexico, USA)

James B. Taylor brings more than 45 years of technical and executive experience to the board of directors of New Sterling.  He has led global development oil and gas projects in Latin America, Southeast Asia, the Middle East and Russia.  Previously, Mr. Taylor has served on the boards of BPZ Resources, Wilbros Group, TMBR-Sharp Drilling, Solana Petroleum of Colombia and Arakis Energy.  Mr. Taylor spent a large part of his career with Occidental Petroleum where he held various senior and executive level roles, Including Executive VP of Worldwide Exploration and Development and COO of Canadian Occidental.

Douglas C. Urch, Director (Calgary, Alberta)

Douglas Urch has over 35 years of oil and gas industry experience.  Previously, Mr. Urch was the Executive Vice President, Finance and Chief Financial Officer of Bankers Petroleum Ltd. and Vice President, Finance and Chief Financial Officer of Rally Energy Corp.  Mr. Urch is a Chartered Professional Accountant (CPA) and a designated member of the Institute of Corporate Directors (ICD). Mr. Urch graduated from the University of Calgary with a Bachelor of Commerce degree.

Gary S. Guidry, Director (Calgary, Alberta)

Gary Guidry is a professional engineer with more than 35 years of experience developing and maximizing assets in the international oil and gas industry. Mr. Guidry has direct experience managing large, international projects, including assets in Latin America, Africa, the Middle East and Asia.  Mr. Guidry is currently the President and Chief Executive Officer of GTE and, most recently, Mr. Guidry was the President and Chief Executive Officer of Caracal Energy ("Caracal"), a London Stock Exchange listed company with operations in Chad, Africa.  Mr. Guidry received a Bachelor of Science degree in Petroleum Engineering from Texas A&M University in 1980 and is an Alberta-registered professional engineer and a member of APEGA.

Ryan Ellson, Director (Calgary, Alberta)

Ryan Ellson has more than 17 years of experience in a broad range of international corporate finance and accounting roles.  Mr. Ellson is currently the Chief Financial Officer of GTE and, most recently, Mr. Ellson was Head of Finance for Glencore E&P (Canada) and prior thereto Vice President, Finance at Caracal.  Mr. Ellson is a Chartered Accountant (CA) and holds a Bachelor of Commerce degree and a Master of Professional Accounting degree from the University of Saskatchewan.

Gavin Wilson, Director (Zurich, Switzerland)

Gavin Wilson is a Director of Sterling and an Investment Manager for Meridian Group of Companies, a private investment company.  Mr. Wilson was the Founder and Manager of RAB Energy and RAB Octane, listed investment funds, from 2004 until 2011.  From 1992 to 2003, he worked with Canaccord Capital London, an investment banking company, as Head of Oil and Gas, responsible for sales and Corporate Brokering/Finance.  He holds a Bachelor of Arts degree in French History and Civilization.

The Transaction

Pursuant to the Transaction:

Completion of the Transaction is subject to the satisfaction of a number of conditions, including, but not limited to: (i) completion of the Financing for minimum gross proceeds of no less than USD$25 million; (ii) the PetroTal Approvals (as defined below) have not been withdrawn, amended, changed or otherwise qualified; (iii) receipt of Court approval of the Transaction; (iv) satisfaction or waiver of all of the conditions to the closing of the Acquisition, other than those which shall be satisfied under the Plan of Arrangement; (v) receipt of TSXV conditional approval for the Transaction and the issuance of Sterling Shares pursuant to the Transaction; and (vi) receipt of all regulatory, governmental and third party approvals required prior to completion.

The current holders of PetroTal Shares and warrants to acquire PetroTal Shares have each unanimously resolved to approve the Transaction (collectively, the "PetroTal Approvals").  Sterling will not be required to obtain shareholder approval of the Transaction pursuant to section 4.1 of TSXV Policy 5.2 as a result of the following factors: (i) the Transaction is not a "Related Party Transaction" (within the meaning of the TSXV's policies); (ii) Sterling is without active operations; (iii) Sterling is not and will not be subject to a cease trade order or suspended from trading upon completion of the Transaction; and (iv) Sterling Shareholder approval of the Transaction is not required to be obtained under applicable corporate or securities laws.

Eight Capital is acting as financial advisor to PetroTal with respect to the Transaction.  Eight Capital has provided a formal opinion that, subject to the various factors, assumptions, qualifications and limitations upon which the opinion is based, the consideration to be received by PetroTal pursuant to the Transaction is fair, from a financial point of view, to PetroTal's shareholders.

PillarFour Securities LLP is acting as financial advisor to Sterling with respect to the Transaction.  PillarFour Securities LLP has provided a formal opinion that, subject to the various factors, assumptions, qualifications and limitations upon which the opinion is based, the consideration to be paid by Sterling pursuant to the Transaction is fair, from a financial point of view, to Sterling (the "Sterling Fairness Opinion").

After considering, among other things, the Sterling Fairness Opinion and other relevant matters including the effects of the Transaction on the Sterling Shareholders and other stakeholders of Sterling, the board of directors of Sterling has unanimously determined that the Transaction is in the best interests of Sterling and fair to the Sterling Shareholders.

Upon closing of the Transaction: (i) New Sterling is expected to have approximately USD$40 million in cash; and (ii) GTE is expected to own, control or direct approximately 38%⁽¹⁾ the Sterling Shares issued and outstanding but, pursuant to an agreement to be entered into with New Sterling at closing, will be restricted from exercising voting rights for greater than 30% of the Sterling Shares outstanding from time to time.

Trading of the Sterling Shares will be halted until the Transaction has closed.

About Sterling

Sterling is a publicly-traded company listed on the TSXV, and incorporated under the laws of Alberta. Sterling was previously engaged in the exploration for, and the development and production of, crude oil and natural gas in the United Kingdom and the Netherlands. In May 2017, before the Transaction was entered into, Sterling commenced a plan to wind-up and dissolve the company.  The plan involved redeeming all issued and outstanding bonds, cancelling and paying in full Sterling's credit facilities, disposing of all funding arrangements for projects, and completing three consecutive cash distributions to the holders of Sterling Shares ("Sterling Shareholders"), with the final cash distribution set to be issued immediately prior to Sterling's formal dissolution.  With all of Sterling's debt disposed of, and one of the cash distributions completed before the Transaction, on June 30, 2017, Sterling's remaining assets  consisted of approximately USD$19.0 million in net working capital as at Sept 30, 2017.

About PetroTal

PetroTal, a company incorporated under the laws of Alberta, is a private junior oil and gas exploration, development and production company formed for the purpose of acquiring, and subsequently enhancing and producing oil and gas from properties in Latin America.  PetroTal currently has no production and has not conducted active operations since its incorporation.

The current directors and officers of PetroTal are: Manuel Pablo Zúñiga-Pflucker (President, Chief Executive Officer and Director), Gregory E. Smith (Executive Vice President, Chief Financial Officer and Director), Charles R. Fetzner (Vice President, Asset Development), Estuardo Alvarez-Calderon (Vice President, Operations) and Sony Gill (Director).

As of the date of this press release, 4,000,001 PetroTal Shares are issued and outstanding.

As a group, the directors and senior officers of PetroTal own or control (directly or indirectly) 1,844,933 PetroTal Shares representing approximately 46% of the outstanding PetroTal Shares.

Additional Information

Additional information regarding the Transaction and PetroTal will be made publicly available by Sterling in due course, including pursuant to the filing statement to be filed on SEDAR in connection with the Transaction at www.sedar.com.

Sterling will apply to the TSXV for an exemption from the sponsorship requirements in connection with the Transaction.  There is no assurance that such exemption will be granted.

PetroTal's work program and other oil and gas information regarding PetroTal and the Assets will be submitted to the TSXV for its review.

Abbreviations

Presentation of Oil and Gas Information

For the purpose of calculating unit costs, natural gas volumes have been converted to a boe using six thousand cubic feet equal to one barrel unless otherwise stated. A boe conversion ratio of 6:1 is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. This conversion conforms to NI 51‑101. Boe may be misleading, particularly if used in isolation.

Contingent resources are the quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology underdevelopment, but which are not currently considered to be commercially recoverable due to one or more contingencies.  Contingencies are conditions that must be satisfied for a portion of contingent resources to be classified as reserves that are: (a) specific to the project being evaluated; and (b) expected to be resolved within a reasonable timeframe. Contingencies may include factors such as economic, legal, environmental, political and regulatory matters or a lack of markets.  It is also appropriate to classify as contingent resources the estimated discovered recoverable quantities associated with a project in the early evaluation stage.

Estimates related to contingent resources:

Estimates of contingent resources included in this press release relating to the Bretaña oil field are based upon the NSAI Contingent Resources Assessment.

The estimates of contingent resources provided in this press release are estimates only and there is no guarantee that the estimated contingent resources will be recovered.  Actual contingent resources may be greater than or less than the estimates provided in this press release and the differences may be material. There is no assurance that the forecast price and cost assumptions applied by NSAI in evaluating the contingent resources will be attained and variances could be material.  There is uncertainty that it will be commercially viable to produce any part of the contingent resources.

Estimates of contingent resources are by their nature more speculative than estimates of proved reserves and would require substantial capital spending over a significant number of years to implement recovery.  Actual locations drilled and quantities that may be ultimately recovered from our properties will differ substantially.  In addition, we have made no commitment to drill, and likely will not drill, all of the drilling locations that have been attributable to these quantities. 

The contingent resources estimates that are referred to herein are risked as to chance of development (i.e. the level of risk associated with the chance of development was assessed by NSAI as part of the evaluations that were conducted).  Risks that could impact the chance of development include, without limitation: geological uncertainty and uncertainty regarding individual well drainage areas; uncertainty regarding the consistency of productivity that may be achieved from lands with attributed resources; potential delays in development due to product prices; access to capital; availability of markets and/or take-away capacity; and uncertainty regarding potential flow rates from wells and the economics of those wells. Risk assessment is a highly subjective process dependent upon the experience and judgment of the evaluators and is subject to revision with further data acquisition or interpretation.

The following classification of contingent resources is used in the press release:

• Low Estimate (or 1C) means there is at least a 90 percent probability (P90) that the quantities actually recovered will equal or exceed the low estimate.
• Best Estimate (or 2C) means there is at least a 50 percent probability (P50) that the quantities actually recovered will equal or exceed the best estimate.
• High Estimate (or 3C) means there is at least a 10 percent probability (P10) that the quantities actually recovered will equal or exceed the high estimate.

In general, the significant factors that may change the contingent resources estimates include further delineation drilling, which could change the estimates either positively or negatively, future technology improvements, which would positively affect the estimates, and additional processing capacity that could affect the volumes recoverable or type of production.  Additional facility design work, development plans, reservoir studies and delineation drilling is expected to be completed by New Sterling in accordance with its long-term resource development plan.

Reader Advisory

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance.  There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Sterling should be considered highly speculative.

This press release is not an offer of the securities for sale in the United States.  The securities have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the Transaction and has neither approved nor disapproved of the contents of this press release.

Neither the TSXV nor its regulation services provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements.  More particularly and without limitation, this press release contains forward looking statements and information concerning the Transaction, the Acquisition and the Financing, the expected composition of the board of directors of New Sterling, the application to the TSXV in respect of the Transaction, New Sterling's business strategy, objectives, strength and focus, New Sterling's capital expenditure program and expectations regarding drilling, production and the timing thereof.

The forward-looking statements and information are based on certain key expectations and assumptions made by Sterling, including expectations and assumptions concerning: Sterling, PetroTal, GTE, GTEIH, the Assets, New Sterling, the Acquisition, the Financing and the Transaction, the negotiation of the Financing on satisfactory terms, the timely receipt of all required securityholder, Court, TSXV and regulatory approvals, the satisfaction of other closing conditions in accordance with the terms of the Arrangement Agreement and the SPA, anticipated netbacks, the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, the need for incremental financing to commercial production, reservoir characteristics, recovery factor, exploration upside,  prevailing commodity prices and the actual prices received for New Sterling's products, the availability and performance of drilling rigs, facilities, pipelines and other oilfield services, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the availability of capital and skilled personnel, and the accuracy of New Stering's geological interpretation of its drilling and land opportunities.

Although Sterling believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward looking statements and information because Sterling can give no assurance that they will prove to be correct.  By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed.  These risks and uncertainties, include, but are not limited to, the results of the due diligence review on any of Sterling, PetroTal or GTE by another party are less than satisfactory, the failure to complete the Financing on satisfactory terms or the parties are unable to obtain the required TSXV and shareholder approvals, risks associated with the oil and gas industry in general (e.g. operational risks in development, exploration and production, and delays or changes in plans with respect to exploration or development projects or capital expenditures), commodity prices, the uncertainty of estimates and projections relating to production, cash generation, costs and expenses, health, safety, litigation and environmental risks, access to capital as well as additional risks associated with operating in a developing country. Due to the nature of the oil and natural gas industry, drilling plans and operational activities may be delayed or modified to react to market conditions, results of past operations, regulatory approvals or availability of services causing results to be delayed.  Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof, and to not use such forward-looking information for anything other than its intended purpose.  Sterling undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

SOURCE Sterling Resources Ltd.