Management Resource Solutions Regulatory News (MRS)

22 Sep 2005 10:20

Melrose Resources PLC22 September 2005 FOR IMMEDIATE RELEASE 22 September 2005 MELROSE RESOURCES PLC Egyptian drilling results Melrose Resources plc today gives the following update of recent drillingactivity on the El Mansoura Concession in Egypt. The El Tamad No.2 was drilled as a directional appraisal well to test thedown-dip section of the El Tamad structure and to establish the oil watercontact in the area. The well reached TD at 7,048 ft in the Miocene Sidi Salimformation. Five intervals were successfully cored and two main reservoirsections were identified and correlated with the Tamad No.1 well. Gas wasidentified in the top carbonate section in conformity with the Tamad No.1 gasoil contact. An oil column of 24 ft was found above a marked oil water contactat 6,624 ft. A 7 ft interval at the top of the oil rim was tested and flowed at1,041 bpd of 45.6 API oil and 780 Mcfpd on a 20/64 inch choke with a well headflowing pressure of 1,120 psi. Melrose has now committed to the fast track development of the Tamad field. Anoil flowline is being built to link up with the existing oil pipeline to Cairoand a gas line is being built to the South Mansoura gas gathering facility. Itis expected that the field will be put on production by year-end at a forecastinitial rate of around 1,000 bopd. The facilities will be sized to allow for theprocessing of oil production from further discoveries in the area. The Kafr el Zahyrah No.1 was an exploration well targeting a shallow amplitudeanomaly in the Pliocene El Wastani formation. The well reached TD at 3,300 ft inthe Kafr El Sheikh formation but there were no gas shows and the well wasplugged and abandoned. The South Mansoura No.7, a directional exploration well, targeted amplitudeanomalies in the Kafr El Sheikh formation, down-dip of the South Mansoura No.1gas field. The well reached TD at 5,097 ft and a 66 ft gas-bearing reservoirinterval was encountered from 4,454 to 4520 ft. A 22 ft interval was perforatedand flowed at 5.6 MMcfpd on a 22/64 inch choke at a well head flowing pressureof 1,440 psi. Pressure analysis showed the accumulation was depleted, confirmingthat the well has tapped reserves in communication with South Mansoura No.1. TheSouth Mansoura No.1 well continues to produce at 9.3 MMcfpd. The No.2 well hasconfirmed the extent of the South Mansoura field although there is no materialincrease in reserves. The ECDC-1 rig has now moved to the Abu Arida location, a shallow Kafr el Sheikhanomaly located at the north end of the existing Mansouriya Channel play.Thereafter, the rig will move back to the El Tamad area to drill four shallowSidi Salim exploration wells on the Tamad oil trend. The PD-104 rig has nowmoved to the West Khilala exploration prospect located in the northwest of theconcession area. The well will test a strong seismic anomaly at the Miocene AbuMadi level. Thereafter, the rig will move to the West Dikirnis location to testa deeper Sidi Salim exploration prospect with oil potential to the northeast ofEl Tamad. Commenting on this, Robert Adair, Chairman, said: "Establishing commercial oil production from the El Tamad field will representanother important milestone for Melrose. As important is the immediatecommitment to drill four more structures with oil potential in the El Tamad areawhich are potentially much larger than El Tamad. While the risk associated withdrilling these structures is higher than drilling seismic anomalies with gasindicators, the probability of finding further oil reserves makes this drillingprogramme very attractive. The deeper Sidi Salim test at West Dikirnis is evenhigher risk but higher potential in terms of reserves. The outcome of thedrilling programme over the next quarter could be very significant for Melrose." 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 0207 462 1603 Buchanan CommunicationsTim Thompson 0207 466 5000Ben Willey or visit www.melroseresources.com This information is provided by RNS The company news service from the London Stock Exchange