SLG San Lorenzo Gold Corp

CALGARY and HOUSTON, March 8, 2018 /CNW/ - Sterling Resources Ltd. ("Sterling" or the "Company") (TSX-V: SLG) is pleased to provide a summary of the Company's 2017 year-end reserves in the Bretana field in Northern Peru. Reserves numbers presented herein were derived from an independent reserves report (the "NSAI Report") prepared by Netherland, Sewell & Associates, Inc. ("NSAI") effective December 31, 2017. Unless otherwise noted, all figures referred to in this press release are denominated in U.S. Dollars.

2017 YEAR-END RESERVES HIGHLIGHTS

• 2P Reserves estimated at approximately 39.8 million barrels of oil.
• 3P Reserves estimated at approximately 79.3 million barrels of oil.
• NPV-10 of approximately $282 million for 2P Reserves and $775 million for 3P Reserves.
• Facilities being mobilized to the field to begin production by year-end.

The Company has certified total Proved + Probable ("2P") reserves of 39.8 million barrels of recoverable oil at the Bretana field. The net present value of before tax future net revenues discounted at 10 percent ("NPV-10") of 2P oil reserves is approximately $282 million. Additionally, the Company has certified Proved + Probable + Possible ("3P") oil reserves of 79.3 million barrels, with a NPV-10 of approximately $775 million.

Manolo Zuniga, Sterling's President and Chief Executive Officer, stated "We are pleased that our contingent resources have converted to reserves with financing in place. Due to limited field data, the 2P reserves are still based on an approximate 12 percent recovery factor of the estimated best-case 330 million barrels of original-oil-in-place. Our team is confident that recoveries should be higher based on their experience in analog fields. The 79.3 million barrels of 3P reserves reflect the concept of higher recoveries, as they are based on an approximate 16 percent recovery factor of the estimated high-case 500 million barrels of original-oil-in-place. We have already begun the process of preparing the location to mobilize equipment and facilities to the field to initiate the long-term testing phase and to deliver first production by year-end 2018."

2017 YEAR-END RESERVES SUMMARY

The summary below sets forth Sterling's reserves as at December 31, 2017, as presented in the NSAI Report. The figures in the following tables have been prepared in accordance with the standards contained in the Canadian Oil and Gas Evaluation Handbook (the "COGE Handbook") and the reserve definitions contained in National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). In addition to the summary information disclosed in this press release, more detailed information will be included in Sterling's annual information form for the year ended December 31, 2017 (the "AIF") to be filed on SEDAR (www.sedar.com) and posted on Sterling's website (www.sterling-resources.com) in April 2018.

Summary of Oil Reserves as of December 31, 2017

Summary of Net Present Values of Future Net Revenue as of December 31, 2017

Summary of Pricing and Inflation Rate Assumptions – Forecast Prices and Costs

The forecast cost and price assumptions assume increases in wellhead selling prices and include inflation with respect to future operating and capital costs. Crude oil benchmark reference pricing, inflation and exchange rates utilized by NSAI as at December 31, 2017 were as follows:

Thereafter, escalated 2 percent on January 1 of each year.

Future Development Costs

The following table sets forth development costs deducted in the estimation of Sterling's future net revenue attributable to the reserve categories noted below:

The future development costs are estimates of capital expenditures required in the future for Sterling to convert the corresponding reserves to proved developed producing reserves. The undiscounted future development costs are $325 million for proved plus probable reserves and $164 million for possible reserves (in each case based on forecast prices and costs).

ABOUT BRETANA FIELD

The Bretana field was first discovered in the 1970's and subsequently re-discovered by Gran Tierra. The field has several wells drilled to delineate the field and recent seismic has also de-risked the structure. The rediscovery well was drilled in 2014 by Gran Tierra Energy Inc. ("Gran Tierra"), and that well tested 18.5 degree API oil from the Vivian formation. The Northern oil fields in Peru have produced over one billion barrels of oil, mostly from the Vivian formation. The Company acquired the properties in Peru on December 18, 2017 from Gran Tierra. The Company is working to put the field on long-term test and begin production as early as Q4 2018.

ABOUT STERLING RESOURCES LTD

Sterling is a publicly-traded oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. The Company assumed control of the assets in Peru on December 18, 2017. The Company's management team has significant experience in developing oil fields in Northern Peru and is led by an independent Board of Directors, focused on safely and cost effectively developing and exploiting the Bretana oil field.

For further information, please contact:

Greg Smith
Executive Vice President and Chief Financial Officer
Gsmith@Petrotal-Corp.com  
T: (713) 609-9026

Manolo Zuniga
President and Chief Executive Officer
Mzuniga@Petrotal-Corp.com  
T: (713) 609-9101

http://www.sterling-resources.com/

FORWARD-LOOKING STATEMENTS

All statements included in this news release that address activities, events or developments that Sterling expects, believes or anticipates will, should or may occur in the future are forward-looking statements. In particular, this news release contains forward-looking statements relating to, but not limited to: Sterling's business strategy, plans and management focus; the timing of release of the AIF, plans with respect to the Bretana field and the anticipated results from this project. In addition, statements relating to expected production, reserves, recovery, costs and valuation are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future.

These forward-looking statements involve numerous assumptions made by Sterling based on its experience, perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. In addition, these statements involve substantial known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will prove inaccurate, certain of which are beyond Sterling's control, including: the impact of general economic conditions in the areas in which Sterling operates, civil unrest, industry conditions, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities. In addition, there are risks and uncertainties associated with oil and gas operations.  Readers should also carefully consider the matters listed under the heading "Risk Factors" in the filing statement of the Company which is available on SEDAR (www.sedar.com).

Although Sterling believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on these forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. Sterling's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements. These statements speak only as of the date of the news release. Sterling does not intend and does not assume any obligation to update these forward-looking statements except as required by law.

OIL AND GAS METRICS

This press release contains oil and gas metrics, including "future development costs", which do not have standardized meanings or standard methods of calculation and therefore such measures may not be comparable to similar measures used by other companies. Such metrics have been included herein to provide readers with additional measures to evaluate the Company's performance; however, such measures are not reliable indicators of the future performance of the Company and future performance may not compare to the performance in previous periods. Future development costs are calculated as the sum of development capital plus the change in future development costs for the period.

The term original-oil-in-place (OOIP) is equivalent to total petroleum initially-in-place ("TPIIP"). TPIIP, as defined in the COGE Handbook, is that quantity of petroleum that is estimated to exist in naturally occurring accumulations. It includes that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations, prior to production, plus those estimated quantities in accumulations yet to be discovered. A portion of the TPIIP is considered undiscovered and there is no certainty that any portion of such undiscovered resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of such undiscovered resources. With respect to the portion of the TPIIP that is considered discovered resources, there is no certainty that it will be commercially viable to produce any portion of such discovered resources. A significant portion of the estimated volumes of TPIIP will never be recovered.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Sterling Resources Ltd.