Management Resource Solutions Regulatory News (MRS)

FOR IMMEDIATE RELEASE

9 July 2012

Operational Update

Melrose Resources plc ("Melrose" or "the Company"), the oil and gas exploration, development and production company, today provides an update on its exploration, development and production operations.

Egypt

The Company has completed operations on the South Khilala-2 development well, which was drilled as a high angle producer in the southern lobe of the field. The well has been tied back to the West Khilala field facilities and is currently flowing at a rate of 14 MMcfpd, bringing the total South Khilala field production rate to 25 MMcfpd. A preliminary assessment of the new well data indicates that the field's total recoverable proved plus probable reserves should increase from 47 Bcf to 60 Bcf.

Following the South Khilala-2 operations, the EDC-9 rig was used to successfully re-enter and complete the East Dikirnis-1 discovery well for production. The well will be put on stream later this year using a low cost tie-back to the West Dikirnis facilities. The field reserves are estimated at 0.3 MMbbl of liquids and 3 Bcf of gas

The rig is currently performing a short work-over on the suspended South Batra-14 development well in order to convert it into a produced water disposal well. Subsequently, the rig will be used to complete the suspended West Abu Khadra well for production and then relocate to southern Egypt to drill the Mesaha exploration well.

Bulgaria

The interpretation of the 3D seismic data acquired over the central area of the offshore Galata Block in 2011 has been completed confirming the presence of a number of potential reservoir structures. A revised prospect inventory has been compiled and audited by the Company's independent reserves assessors.

Seven structures have been identified in the area with a total combined unrisked P50 prospective resource estimate of 125 Bcf. The highest ranked prospect is called Kamchia, which has an estimated P50 prospective resource of 27 Bcf and a chance of success of 40 percent. Preparations are underway to drill this well as early as operationally practicable which is expected to be in early 2013 as part of a multi-well rig programme. The programme includes the completion of the Kavarna East discovery and two exploration wells in Romania.

In the event of drilling success on the Kamchia prospect, the discovery would be developed using a low cost subsea tie-back to the Galata field production platform which is similar to the approach used for the Kavarna and Kaliakra field developments. 

Romania

Seismic acquisition operations have recently commenced on the Company's Muridava and Est Cobalcescu concessions in the Romanian Black Sea using the Vyacheslav Tikhonov seismic vessel. The planned acquisition programme comprises 1,920 square kilometres of 3D data, sufficient to cover both licences, and the survey is now 28 percent complete.

Licence Update

The Company is pleased to confirm that it has submitted bids for two exploration licenses, namely, Patraikos and Ioannina, currently being tendered by the Greek Government. Melrose's bidding partners are Hellenic Petroleum S.A. and Edison International SpA with each company holding a 33.3 percent interest in the group.

Melrose has also submitted a bid for the Khan Asparuh licence in the Bulgarian waters of the western Black Sea. The Company has bid for the block on a 100 percent basis but would expect to reduce its interest in the licence to around 35 percent in the event of a successful award. 

The licence applications are consistent with the Company's strategy of increasing its exposure to high quality exploration acreage whilst continuing to reducing its gearing.

In France, the Company is still awaiting clarification from the French authorities following the submission of an extension request to its Rhone Maritime licence. The prescribed time for a response by the authorities has passed with no contact made and the Company is currently evaluating its legal options in relation to this license.

Commenting on this report, David Thomas, Chief Executive, said:

"The South Khilala-2 well results are very positive, both from a reserves and deliverability perspective, and will help underpin our production forecast. We are also encouraged by the outcome of the seismic interpretation on the Galata block, offshore Bulgaria, and pleased to have commenced the 3D seismic programme on our new concessions offshore Romania. These two initiatives will support an exciting drilling programme in the Black Sea in 2013."

For further information please contact:

or visit www.melroseresources.com

Glossary:

Bcf - billion cubic feet of gas

MMbbl - million barrels of oil, condensate or natural gas liquids

MMcfpd - million cubic feet of gas per day

Mboepd - thousand barrels of oil, condensate or natural gas liquids equivalent per day

Disclaimer

This announcement contains certain operational and financial information in relation to 2012 that is subject to final review and has not been audited. Furthermore it contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the oil and gas exploration and production business. Whilst Melrose believes the expectations reflected herein to be reasonable, the actual outcome may be materially different owing to factors either within or beyond Melrose's control, and accordingly no reliance may be placed on the figures contained in such forward looking statements.