Stirling mulls Indonesia Camar oil field plans

Stirling mulls Indonesia Camar oil field plans

SYDNEY (Reuters): Oil and gas group Stirling Resources NL said
yesterday funds from its recently announced rights issue would go
to fund development of its Camar oil field interests in
Indonesia.

"The main amount of money will be spent in Indonesia,"
managing director Dennis Morton told a media briefing.

Stirling has set a non-renounceable 1-for-1 rights issue at
five cents a share with one free attaching option for every two
new shares applied for.

The issue is targeted to raise A$10.2 million.

"We think it is a really good asset, but it does require quite
a deal of additional expenditure to bring it into production,"
Morton said of the Camar field.

Total costs for planned development amounted to US$34 million,
of which Stirling has to fund 16 percent.

The remaining 84 percent interest in the field is held by
Canada-based Carmanah Resources Ltd.

The Camar project was underdeveloped and the current program
would raise production rates from the current 1,000 barrels of
oil per day (BOPD) to about 7,500 BOPD by the end of calendar
1998, Morton said.

Project finance had been planned in the original funding, but
the Asia crisis spillover into Indonesia had quashed bank
interest in Indonesian projects, irrespective of individual
merits.

"Even though this was a tidy project, the banks elected to
close their books on Indonesia," Morton said, adding that
independent experts' evaluation of the offshore Java project had
been positive.

Morton said the company had no problems with its Indonesian
dealings with sales to Indonesian state oil company Pertamina
currently on a normal 30 day credit cycle.

Stirling is 31.4 percent owned by Capital Energy N.L.

Stirling shares were a tenth of a cent lower at 5.1 cents on
turnover of 183,900 shares by 1.55 p.m. (0355 GMT).