Sterling Resources (SLG-V) after deciding to sell its last active assets, wind up its operations and conclude its nearly four-decade-long story. This story has not been a happy one of late. The company was incorporated all the back in 1979, as Peoples Oil Corp. It focused initially on North America. In 1997, it changed its name to Sterling and obtained its first international assets, in Romania. Entry into the United Kingdom followed one year later. In the early 2000s, the company acquired the Breagh field and the Cladhan field, both in the North Sea. Those are now its two core assets. Virtually everything else has been sold over the years. Initially, the sales reflected Sterling's desire to become a bigger fish in the North Sea, but more recently they reflected deep financial woes, which culminated in a recapitalization last spring. Among other things, the recapitalization saw Sterling issue over 14 billion shares for debt. It then conducted a 1-for-100 rollback last July. Adjusted for the rollback, Sterling's stock has disintegrated to 90 cents now from a high of $494 in 2011, a decline of 99.8 per cent.***
Now Sterling will end the misery. It plans to sell its U.K. subsidiary to the Amsterdam-based Oranje-Nassau Energy, another old-timer. Oranje-Nassau entered the oil and gas industry in 1967 and is now the largest privately owned Dutch producer. It says on its website that its goal is to become "the southern and central North Sea operator of choice." Sterling's assets will help with that goal by boosting Oranje-Nassau's production to about 25,000 barrels a day from about 22,000. In exchange for the assets, Sterling will receive net proceeds of around $113-million (U.S.). It will then have no active operations, and so it plans to wind up and distribute its cash to shareholders, who can expect 97 cents to $1.02 a share, by Sterling's estimates. Sterling will seek shareholder approval for these arrangements at a meeting tentatively scheduled for May 8.
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