Management Resource Solutions Regulatory News (MRS)

27 Apr 2005 14:58

Melrose Resources PLC27 April 2005 FOR IMMEDIATE RELEASE 27 April 2005 MELROSE RESOURCES PLC El Mansoura Concession Update Melrose Resources plc today gives the following update of recent drilling andconcession activity on the El Mansoura Concession in Egypt. Concession The Egyptian Parliament has confirmed a six-year extension to the El MansouraConcession. The extension will be for two additional three-year explorationperiods from the expiration date of the current exploration concession in June2006. No further relinquishments from the existing Concession area ofapproximately 950 km(2) will be required. Drilling The ECDC-1 rig has drilled two successful exploration wells during the firstquarter of 2005. Both the Al Arab and Sinfas wells, located in the SouthMansoura area encountered and tested gas in Pliocene intervals and have beencompleted as producing wells. The Al Arab well tested at approximately 4.5MMcfpd on a 16/64 choke and 1,420 psi well head flowing pressure prior to beingcompleted using a gravel pack. The Sinfas encountered two pay intervals and thelower interval was tested at 8.9 MMcfpd plus 67 bcpd on a 28/64 choke with 1,880psi well head flowing pressure. Both wells await hook-up to the productionfacilities. The ECDC-1 rig is now drilling the El Tamad well, targeting the Miocene SidiSalim formation at around 8,000 ft. Success in the Sidi Salim formation could beimportant for the evaluation of larger and deeper prospects in this horizon. Two step out wells have been drilled on the South Batra Field. The South BatraNo.19 was drilled to the Miocene Abu Madi and successfully encountered thereservoir section. Mechanical difficulties curtailed testing of the well whichwas then sidetracked to a new up-dip location. The Abu Madi reservoir sectionencountered here was found to be very tight and did not flow on test. ThreePliocene intervals were perforated between 8,200 ft and 8,900 ft and were testedat non-commercial rates. The South Batra No.20 was drilled as a step out to thesouth of No.19 and the Abu Madi section was cored. Condensate was confirmed inthe section above the field water contact but the reservoir again proved poorand the interval did not flow on test. Pliocene intervals tested gas atnon-commercial rates. Differential compaction appears to have impaired porosityand permeability along a narrow structural high running north south through themiddle of the channel system. The result of the South Batra No.20 has clarifiedthe areal extent of the South Batra field towards the south-east. The results ofthe two wells have not had a material impact on booked reserves. The SF-104 rig has side-tracked the South Batra No.15 well which wassuccessfully tested in the Pliocene Mansouriya channel sand at a rate of over 20MMcfpd. The sidetrack encountered 65 ft of excellent quality reservoir and thewell will now be completed. The EDC-9 drilling rig is currently drilling the South Batra No.17 well at adepth of 7,545 ft. The well is being drilled to test targets in both thePliocene and Miocene reservoirs. The well has intersected the Pliocene target at6,900 ft and encountered a reservoir interval of approximately 150 ft with highgas shows. The well will continue to a depth of 8,960 ft before logging thePliocene interval and subsequently drilling into the Miocene target. Commenting on this, Robert Adair, Chairman, said: "We are extremely pleased to have received confirmation of the six-yearextension of the El Manosura Concession. Melrose and its partner Merlon havecommitted significant resources to the exploration and fast-track development ofthe concession area. The large 3-D seismic acquisition programme, the firstonshore in the Nile Delta, has proven to be a very effective tool and has setthe standard for exploration in the area. Recent drilling results have been mixed but we are now achieving consistentsuccess on the shallow Pliocene exploration plays. The South Batra No.15 resulthas also confirmed the potential of the Pliocene channel reservoirs. The latestSouth Batra wells, after a good run of success, have demonstrated that channelsystems do inevitably present some surprises. The South Batra No.19 encountereda good pay section initially and the No 20 location was an aggressive step-outto the south. The results do provide further important data and experience. Wenow look forward to drilling later on this year some of the larger prospects nowbeing confirmed on the newly-processed 3-D seismic over the northern half of theconcession." Notes 1. Melrose owns a 50% interest in the El Mansoura Concessionand the South East El Mansoura Concession and a 46% interest in the QantaraConcession in Egypt; 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/Ben Willey 0207 466 5000 or visit www.melroseresources.com. This information is provided by RNS The company news service from the London Stock Exchange