Management Resource Solutions Regulatory News (MRS)

20 Jun 2005 14:43

Melrose Resources PLC20 June 2005 FOR IMMEDIATE RELEASE 20 June 2005 Melrose Resources plc AGM announcement Melrose Resources plc announces that at the Annual General Meeting today, theshareholders of the Company approved all of the resolutions put before themeeting. At the meeting Robert Adair, Chairman, gave the following update ofrecent activity and of the outlook for the Group: "The prospects for the Group continue to look very encouraging. There have beensome interesting new developments on the exploration front in Egypt which offergreat promise and we are looking forward to our forthcoming drilling programmein Bulgaria this summer. Bulgaria The first anniversary of production from the Galata gas field has just passedwith average daily production of 53 MMcfpd over this period. Current productionis over 60 MMcfpd and the rate of pressure decline has been less than expected,which provides reassurance for field proved and probable reserves. A drilling rig has been contracted to drill at least two wells later thissummer, with an option on a third well, and the rig is due on location inmid-August. The Galata East appraisal well is the first well scheduled to bedrilled. The Galata East structure is located close to the existing Galata gasfield on the Galata Production Concession and has potential reserves estimatedat 45 Bcf. If the well is successful these reserves can easily be producedthrough the existing Galata production facilities. The Galata East well will befollowed by an exploration well on Block Kaliakra 99. Interpretation of the 3-Dseismic acquired on Block Kaliakra 99 in 2004 is continuing: a number ofmaterial prospects have already been identified and these are being risk-gradedbefore final selection of the target. A series of related large prospects, withreserve potential of up to 500 Bcf, has been identified close to the 1986Samotino More gas discovery well and one of these prospects is the most likelyexploration drilling target. The Ministry of Energy has recently confirmed the transfer of ownership toMelrose of the Emine and Rezovska licenses. These licences have a number ofprospects and leads with the potential for both oil and gas. Egypt Melrose and its partner currently have three rigs under contract in Egypt.Recent drilling results have been very encouraging with an exciting newexploration play with oil potential opening up. The South Batra No.17 was a discovery well in the Kafr el Sheikh formation wheretwo zones were identified and separately tested at 4.5 MMcfpd and 4.6 MMcfpd.This well has been completed and will be put on production. The South BatraNo.21 well is currently drilling to test the eastern extent of the Abu Madichannel system. The well intersected a 60 ft gross gas/condensate columnwithin the Abu Madi Level II reservoir and then took a gas-kick in a deeper,overpressured zone, possibly within the Sidi Salim formation. Drilling intothis zone has restarted following the installation of a 10,000 psi blow-outpreventer which is required for the higher pressures being encountered. The El Tamad exploration well has been drilled to test a Sidi Salim objective inthe southern area of the El Mansoura concession. Wireline logging has indicateda gross hydrocarbon column of 87 ft (67 ft of gas above 20 ft of oil confirmedby wireline fluid sampling) within the Sidi Salim between 6,363 ft to 6,450 ft. No oil/water contact has been encountered. The appraisal of the downdip extentof the oil column will now become a priority. This discovery is potentially verysignificant as it opens up a new exploration play with the benefit of offeringhigher-value oil production to complement our existing gas production. The South Mansoura No.6 well is currently drilling to an Abu Madi Level IIItarget and on the way down has encountered a 35 ft gross reservoir section withsignificant gas shows within the Kafr el Sheikh formation. The deeper Abu Madisection is currently being drilled and evaluated. A further 14 wells are planned before the end of the year. These will includefurther appraisal and development wells on the South Batra field and a number ofinteresting exploration wells, including wells on the Zahayra and Khilalaprospects which have reserve potential of 100 - 300 Bcf. USA In the USA this year we have drilled 7 new wells on the Jalmat Unit withcontinuing good results and in total a further 22 new wells are currentlyscheduled for the second half of 2005. We are on target to achieve productionof up to 1,500 boepd by the end of the year. We are benefiting from the strongoil price, with average realisations this year of $44.54/bbl and this shouldenable us to accelerate our drilling programme over the next 12 months. France An additional 3,300 km of recently reprocessed seismic data has been purchasedover the Rhone Maritime permit. This data will be incorporated into the seismicdatabase and used to provide a more detailed interpretation of the prospectivityof the permit." For further information please contact Melrose Resources plcRobert Adair, Executive Chairman 0184 553 7037David Curry, Chief Executive 0131 221 3360Munro Sutherland, Finance Director 0131 221 3360Chris Thomas, Corporate Development Director 0207 462 1603 Buchanan Communications LimitedTim Thompson 0207 466 5000 or visit www.melroseresources.com This information is provided by RNS The company news service from the London Stock Exchange