Management Resource Solutions Regulatory News (MRS)

7 Nov 2007 09:55

Melrose Resources PLC07 November 2007 FOR IMMEDIATE RELEASE 7 November 2007 MELROSE RESOURCES PLC ("Melrose" or "the Company") Bulgarian operations update Melrose Resources plc (LSE:MRS), the oil and gas exploration, development andproduction company, today provides an update on its Bulgarian operations. Following a review of recent Black Sea drilling results, Melrose is in theprocess of withdrawing from its deep water acreage position and refocusing itsactivities in the shallow water areas. As part of this process, the Companyhopes to shortly secure the Galata Exploration Block which surrounds the Melroseoperated Galata field and contains some attractive prospectivity. The Companyhas also now signed an agreement with Bulgargaz, the Bulgarian state-owned gasutility company, under which the two companies will conduct a joint feasibilitystudy to evaluate the conversion of the Galata field into a gas storagefacility. In light of these business development initiatives, the Company plans to resumeoperations with the Atwood Southern Cross semi-submersible drilling rig to takeadvantage of the competitive rig day rates. The drilling rig will initially beused to complete an appraisal well, Galata East No. 2, in the eastern faultblock of the Galata field. This region of the field is not being directlydrained by any producing wells and the new well will provide reservoir pressureand deliverability data required for the Galata gas storage feasibility studies.The well will then be temporarily suspended for potential use as part of the gasstorage scheme. Subsequently, contingent on ongoing discussions with theBulgarian authorities, the rig may be used to drill an exploration prospect inthe vicinity of the Galata field. Following the completion of the above operations, the Company will conclude itsoutstanding commitments with the Southern Cross rig and prepare the unit fordemobilisation out of the Black Sea. The anticipated cost for the remaining rigprogramme including mobilisation, drilling and demobilisation activities isapproximately $15 million. Commenting on the above, David Thomas, Chief Executive, said: "The planned drilling programme is consistent with Melrose's strategy ofrefocusing our Bulgarian activities on lower risk shallow water projects wherewe can leverage our existing field infrastructure and geologic knowledge. Elsewhere in our portfolio, operations on the Egyptian West Dikirnis developmentcontinue to run smoothly and the project is in its final stages of pipe work andcabling hook-up. First oil is expected in November. We are currently drillingthe Buhut exploration well in the west of the Mansoura concession, whilstoperations with our second exploration dedicated Egyptian drilling rig have beentemporarily suspended until around year end pending rig draw works repairs. In East Texas, we expect to start drilling the first of our two planned gasfield appraisal wells, Johnson No.1, in early December." For further information please visit www.melroseresources.com or contact: Melrose Resources plc 0131 221 3360David Thomas, Chief ExecutiveRobert Adair, Executive ChairmanMunro Sutherland, Finance Director Buchanan Communications 0207 466 5000Tim ThompsonBen Willey This information is provided by RNS The company news service from the London Stock Exchange