Management Resource Solutions Regulatory News (MRS)

21 Apr 2006 11:54

Melrose Resources PLC21 April 2006 FOR IMMEDIATE RELEASE 21st April 2006 MELROSE RESOURCES PLC Egyptian exploration update Melrose Resources plc today announces the results of recent exploration drillingin Egypt. The Al Rawda exploration well was the first well drilled in the SE El MansouraConcession. The well was drilled to target a Sidi Salim prospect to thesouthwest of the El Tamad discovery using the ECDC-1 rig. The target intervalwas encountered between 5,866 ft and 5,910 ft and was gas filled. This isbelieved to be the gas cap overlying an oil column down-dip. A 31 ft intervalwas perforated and the well was flowed at 10.9 MMcfpd and 55 bcpd on a 28/64thschoke with a flowing well head pressure of 2,223 psi. The well will be put onproduction, tied in through the existing Sinfas facilities, as a gas producer. The rig was then moved to the South Tunbarah location which lies between ElTamad and Al Rawda on the same Sidi Salim trend. The top target interval wasencountered at 6,100 ft and encountered good hydrocarbon shows but was waterwet. The well was abandoned. The ECDC-1 rig was then moved to the Sinfas wellwhich was originally completed in and produced from a zone at 4,970 ft to 4,982ft. This lower interval was plugged and the best interval in the well from 3,780ft to 3,810 ft was tested through 10 ft of perforations. The well flowed at 6.33MMcfpd of dry gas on a 24/64ths choke with a flowing well head pressure of 1,492psi. The well will be produced through the existing facilities. The Salaka exploration well was spudded on 8th February using the PD-104 rig.This prospect lies on the southern extension of the Miocene channel system onthe west side of the South Batra Field. Good hydrocarbon shows were encounteredin three Miocene reservoir intervals (Abu Madi and Qawasim) between 8,700 ft and9,700 ft. The wireline logs indicated that the upper interval from 8,720 ft to8,880 ft, which had good hydrocarbon shows while drilling, is water wet. It islikely that this interval could be productive in an updip location which has astrong seismic anomaly. The middle interval from 9,140 to 9,214 was tested at9.0 MMcfpd and 105 bcpd on a 24/64ths choke with a flowing wellhead pressure of1,846 psi. The lower interval between 9,437 ft and 9,632 ft was tested at 8.5MMcfpd and 165 bcpd on a 24/64ths choke with a flowing well head pressure of2,404 psi. The structures are being re-mapped and an appraisal location beingworked up in order to test the full reserve potential of the Miocene in theSalaka area. A small Pliocene target was also confirmed through a 26 ft gasinterval with potential of 4 Bcf of reserves. The rig is currently moving to theKhilala No.2 appraisal well location. The EDC-9 rig is currently drilling the NE Mit Dafir exploration well targetinga higher risk Miocene channel prospect on the eastern side of the El MansouraConcession. Commenting on these developments, Robert Adair, Chairman, said: "We continue to maintain a high rate of drilling success in Egypt. The Salakawell result is particularly important as it is in effect a South Batraextension. This supports our view that the South Batra field has considerableupside in the channels we have identified to the north and south of theestablished field area. Further prospects on other extensions to the South Batrachannel system have been upgraded following this success. "The first well to appraise our West Khilala discovery will spud shortly. Ifsuccessful, this well could justify a significant increase in reserves.Following the NE Mit Dafir well, we will drill the first of two planned AbuKhadra wells. Abu Khadra is an exciting Abu Madi Level II prospect, analogous toKhilala. We will also drill the first well to appraise our West Dikirnisdiscovery. "In anticipation of the completion of the processing of the new 3-D seismic,which will be shortly available, covering the eastern side of the El MansouraConcession, a full review of all our data will occur to assess the deeperprospectivity of the licences. While this review is underway, our drillingcampaign will continue with two rigs on the targets already identified whichallows for one of the deep rigs to be loaned to another operator for six months.Full rig utilisation is planned to resume later in the year." For further information please contact: Melrose Resources plc 0184 553 7037Robert Adair, Chairman 0131 221 3360David Curry, Chief Executive 0131 221 3360Munro Sutherland, Finance Director 0207 462 1603Chris Thomas, Corporate Development Director Buchanan Communications 0207 466 5000Tim ThompsonBen Willey or visit www.melroseresources.com This information is provided by RNS The company news service from the London Stock Exchange