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3 Dec 2008 07:00
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FOR IMMEDIATE RELEASE
3 December 2008
MELROSE RESOURCES PLC
ProductionΒ guidanceΒ andΒ plannedΒ capitalΒ workΒ programmeΒ for 2009
Melrose Resources plcΒ (LSE: MRS) ("Melrose" or "the Company") the oil and gas exploration, development and production companyΒ todayΒ gives the following production guidance for 2009 andΒ information regarding itsΒ plannedΒ capital expenditureΒ programmeΒ forΒ the year.Β
MelroseΒ forecasts thatΒ itsΒ averageΒ daily production rateΒ in 2009Β will beΒ 34Β MboepdΒ on a Working Interest basisΒ and 15Β MboepdΒ on aΒ Net Entitlement basis.Β TheΒ splitΒ between gas and hydrocarbon liquids productionΒ isΒ as follows:Β
Β
|
Β
|
Gas (MMcfpd)
|
Liquids (Mbpd)
|
Β Total (Mboepd)
|
|
Working Interest basis
|
138
|
11
|
34
|
|
Net Entitlement basis
|
60
|
5
|
15
|
TheΒ forecast is based on production fromΒ Melrose'sΒ existingΒ oil and gasΒ fieldsΒ andΒ assumesΒ the timely completion of currentΒ developmentΒ projects. ItΒ does not, however,Β assume any contribution fromΒ futureΒ exploration successes.Β
MelroseΒ hasΒ preparedΒ its exploration and developmentΒ work programme forΒ 2009Β and currentlyΒ plansΒ totalΒ capital expendituresΒ ofΒ approximatelyΒ $165Β million during the year.Β This compares with expected capital expenditures ofΒ around $220Β millionΒ in 2008. The reduced expenditure level reflects the Company's desire to focus its investments on high capital efficiency projects during a time of oil price weakness. In addition,Β a number of non-essential work programme items have been deferred in order to take advantage of the expected decline in the cost of oil field materials and services over the forthcoming months.Β
ApproximatelyΒ 75%Β of the Company's capital investment in 2009 will be dedicated to fieldΒ developmentΒ activities and the remainingΒ 25%Β toΒ explorationΒ initiatives.Β TheΒ capitalΒ allocation by country toΒ Egypt, theΒ USA,Β BulgariaΒ andΒ TurkeyΒ isΒ $105Β million,Β $31Β million,Β $27Β millionΒ and $2Β million, respectively.
TheΒ planned fieldΒ development programmesΒ for 2009 are summarised as follows:Β in Egypt,Β theΒ West Dikirnis Phase IIΒ projectΒ and the tie-back ofΒ recentΒ exploration discoveries; inΒ theΒ USA,Β a continuation of the Permian Basin infill and waterflood programmeΒ (withΒ an average ofΒ one rigΒ operating during the year);Β and in Bulgaria,Β the Kavarna field development and Galata gasΒ fieldΒ storage project.Β PlannedΒ BulgarianΒ expendituresΒ reflect the Company'sΒ intentionΒ to bringΒ inΒ aΒ strategic partner, at a 40% equity level, to the GalataΒ exploration block andΒ toΒ the Galata gas storage project.
Exploration activities include 3D and 2D seismic acquisition inΒ EgyptΒ (on the SE El Mansoura and Mesaha concessions)Β andΒ TurkeyΒ (South Mardin) andΒ sixΒ exploration and appraisal wellsΒ to be drilledΒ inΒ Egypt, theΒ USAΒ andΒ Bulgaria.Β Β
Β Β Commenting on this,Β David Thomas,Β ChiefΒ Executive,Β said:
"OurΒ productionΒ guidanceΒ forΒ 2009 reflects the Group's strongΒ assetΒ base,Β although net entitlement volumes next year will be lower than in 2008 sinceΒ weΒ will shortly beΒ shuttingΒ inΒ the Galata fieldΒ in orderΒ toΒ prepareΒ forΒ its plannedΒ conversion to a gas storage facility.Β We expect production volumes to increase again in 2010 when we will benefit fromΒ a full year ofΒ contributionΒ fromΒ our newΒ BulgarianΒ discoveries and the West Dikirnis field inΒ EgyptΒ should be on peak production.
We are very pleasedΒ thatΒ the CompanyΒ isΒ inΒ fullΒ controlΒ ofΒ its capital expenditureΒ programmeΒ at this time of oil price volatility and uncertainty in the financial markets.Β WeΒ planΒ to continue withΒ keyΒ development expenditures and to maintainΒ aΒ sensibleΒ level of exploration activityΒ consistent withΒ operatingΒ within our current loan facilities. IfΒ weΒ increase our loan facilities,Β or ifΒ revenues areΒ higher thanΒ expected,Β we willΒ considerΒ increasingΒ theΒ work programme later in the yearΒ or makingΒ selectiveΒ investmentsΒ to take advantage of new business opportunities whichΒ are likely toΒ arise as a result of current market conditions."Β Β
For further information please contact:
|
Melrose Resources plc David Thomas, Chief Executive Robert Adair,Β ExecutiveΒ Chairman Munro Sutherland, Finance Director |
0131 221Β 3360 |
|
Buchanan CommunicationsΒ Ben Willey Ben Romney |
0207 466 5000 |
or visit www.melroseresources.com
Glossary:
Mbpd -thousandΒ Β barrels of oil or condensate per day
Mboepd -thousandΒ Β barrels of oil equivalent per dayΒ
MMcfpd - million cubic feet per day
Disclaimer
This announcement contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the oil and gas exploration and production business. WhileΒ MelroseΒ believes the expectations reflected herein to be reasonable, the actual outcome may be materially different owing to factors either within or beyondΒ Melrose's control, and accordingly no reliance may be placed on the figures contained in such forward looking statements.Β
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