Management Resource Solutions Regulatory News (MRS)

24 Jan 2005 07:00

Melrose Resources PLC24 January 2005 FOR IMMEDIATE RELEASE 24 January 2005 MELROSE RESOURCES PLC Drilling & Operations Update Melrose Resources plc today gives the following update of recent seismicacquisition, drilling and development activity in all three areas of operation. Bulgaria Initial fast-track processing of the 3-D seismic data survey of 1,470 km(2) overthe southern area of Block 91-III and Block Kaliakra 99 has been completed andthe new data set is proving to be of excellent quality. Detailed interpretationswill become available over the next two months. The data set over the deeperwater area, particularly in the Kaliakra 99 Concession area, is lookingextremely interesting and prospects for drilling are already being identified. Egypt Three drilling rigs are currently operating on the El Mansoura Concession inEgypt. The EDC-9 rig spudded the South Batra No.8 Pliocene appraisal well inNovember. The well was drilled to a depth of 7,605 ft and the reservoir intervalwas encountered at 7,152 ft. A gross reservoir interval of 60 ft was confirmedand a 25 ft interval has been perforated and flowed briefly to clean up the wellprior to gravel pack completion. The well will be production tested directlyinto the gas plant once the tie-in to the gathering system has been completed. The EDC-9 rig subsequently drilled the South Batra No.18 well to a depth of8,058 ft targeting the same reservoir as South Batra No.8. This well encounteredthe top of a 168 ft gross gas-bearing interval in the Pliocene at 6,936 ft andthe whole interval was perforated. The zone is currently being gravel-packcompleted prior to tie-in to the production facilities. The rig will then moveto the South Batra No.20 location which will be drilled to 10,500 ft to test thesouthern limits of the South Batra Abu Madi Channel system. The SF-104 rig drilled the South Batra No.2A well, which is a sidetrack of theoriginal No.2 well, to an updip location in the Abu Madi Level II reservoir. Thewell was tested and completed and is now on production. The rig has also drilledthe South Batra No.19 well which is currently being tested. An Abu Madi intervalof 95 ft gross (50 ft net) has been identified and confirmed by wireline tests.In addition to the main Abu Madi target, the well has also encountered asignificant hydrocarbon column in the Pliocene Kafr El Sheikh and threeintervals totalling 129 ft gross are being tested. The rig will move next to theSouth Batra No.21 location which is on the east side of the Production Lease andhas both Abu Madi and Pliocene targets. The ECDC-1 rig commenced side-track operations at the South Bilqas well locationat the end of November. While a gas-bearing interval was encountered, thereservoir section appeared relatively poor and the interval was not completed.Further options are now being considered for the optimum well location for thisproven structure. In December the rig then drilled the Al Arab well in thesouthern area of the concession. This well encountered a Kafr El Sheikhreservoir section at 5,090 ft: a 30 ft net interval was perforated and brieflyflow tested. The well has been gravel-pack completed and is awaiting hook-up.The drilling of the Shubra exploration well commenced in January 2005 and themain target was encountered between 3,700-3,800 feet. While gas shows wereencountered, the well did not flow on open-hole test and is therefore beingabandoned. The new production gathering facilities at the South Batra No.11 site arecomplete and the upgraded process equipment at the South Batra No.1 site can nowhandle up to 120 MMcfpd plus condensate production. Total gas-processingcapacity on the concession (South Batra, Mansouriya and South Mansoura) is 150MMcfpd. The production target on the concession by the end of next month, afterthe 6 new wells have been tied into the production facilities, is 120 MMcfpdwith 150 MMcfpd targeted by mid-year. The 3-D seismic acquisition programme over the El Mansoura Concession iscontinuing and the final phases, 13 and 14, of the survey are now active. Over1,600 km(2) of 3-D seismic covering the most of the concession will have beenacquired as the survey is completed in March. Detailed interpretation is nowunder way as the final processing of the data sets is received. Channel systemsanalogous to that encountered in Mansouriya are the main target in the Plioceneand further extensions of the major Abu Madi channel system have already beenidentified. In the near term, appraisal drilling of the South Batra area willcontinue to be the main focus for the two deeper-rated rigs while the smallerECDC rig will be used for exploration of the shallow Kafr El Sheikh play. USA A further 7 new wells were drilled on the Jalmat field in the 4th quarter of2004 and all these wells are now on production. Gross production from these newwells is currently approximately 800 boepd (600 boepd net). Production ratesinitially decline quite quickly, but these initial rates have been at the topend of expectations. These wells have also confirmed the extension of the fieldto the south and the west which will result in additional proved reserves beingbooked. Water injection programmes have now been activated on all three principal fieldsand these programmes will be systematically expanded during 2005. Commenting on this, Robert Adair, Chairman, said: "In Bulgaria, the new 3-D seismic data set is looking very interesting and clearprospects are already emerging in the south-eastern area of the survey. In Egypt, the main focus remains the South Batra appraisal and developmentprogramme with drilling success in the Kafr El Sheikh Mansouriya Channel trendand the Abu Madi Channel. A very active drilling programme is ongoing with threedrilling rigs under contract. The anticipated expansion of El Mansouraproduction to 150 MMcfpd by mid-2005 is exciting and I expect to see significantexpansion beyond that later in the year. The final processed data sets for the3-D seismic survey are now becoming available and these new data sets areexpected to greatly enhance our understanding of the concession area. The results from our most recent drilling programme in the USA are excellent andwe are making good progress towards achieving our medium term objectives there. 2004 has been a year of consolidation with a good production base beingestablished in Bulgaria and Egypt and further development in the USA. We nowlook forward to a stronger focus on exploration in 2005." Notes 1. Melrose has 100% ownership of Block 91-III and Block Kaliakra 99, offshore Bulgaria; 2. Melrose owns a 50% interest in the El Mansoura Concession and a 46% interest in the Qantara Concession in Egypt; 3. Melrose has approximately 100% working interests in three main field areas in west Texas and eastern New Mexico in the USA. For further information please contact: Melrose Resources plcRobert Adair, Chairman 0184 553 7037David Curry, Chief Executive 0131 221 3360Munro Sutherland, Finance Director 0131 221 3360Chris Thomas, Corporate Development Director 020 7462 1603 Buchanan CommunicationsTim Thompson/Ben Willey 020 7466 5000 or visit www.melroseresources.com. This information is provided by RNS The company news service from the London Stock Exchange