Management Resource Solutions Regulatory News (MRS)

11 Jan 2006 07:00

Melrose Resources PLC11 January 2006 FOR IMMEDIATE RELEASE 11 January 2006 MELROSE RESOURCES PLC Drilling results in Egypt Melrose Resources plc today announces the results of recent exploration activityin Egypt. Initial testing of the West Dikirnis No.1 exploration well, which was drilled toa depth of 8,570 ft, has been completed. The logs over the Miocene Qawasiminterval indicated a 147 ft gross gas filled interval from 8,171 ft to 8,318 ftwith no water contact. Three separate intervals totalling 101 ft net wereidentified and the lowest interval of 24 ft from 8,292 ft to 8,316 ft was testedwhile the rig was on site. The well flowed from this lowest interval at a finalstabilised rate of 21.7 MMcfpd and 894 bcpd with no water on a 32/64ths choke,with a well-head flowing pressure of 2,368 psi. The PD-104 rig has been releasedto move to the location of the North Aga No.1 exploration well. The remainingtwo upper intervals will be perforated and tested incrementally over a longerperiod using a workover rig. It is expected that a steady production rate ofover 30 MMcfpd plus 1,400 bcpd should be achieved when this well is put onproduction through the South Batra plant facilities. The initial recoverablereserves assigned to the immediate structural closure at West Dikirnis are 120Bcfe of gas and condensate but the final figure could be considerably higher.The location of an initial appraisal well on the West Dikirnis structure isbeing identified. Further significant similar prospects, based on theinterpretation of seismic anomalies, are currently being evaluated in thegreater West Dikirnis area. The South Batra No.24 appraisal well was drilled to a depth of 10,102 ft usingthe EDC-09 rig. The Abu Madi Level II target was encountered on prognosis withapproximately 60 ft of gross reservoir section above the water contact. Aninterval from 9,550 ft to 9,594 ft was perforated and the well was flowed on a28/64ths choke at a rate of 10.7 MMcfpd with 180 bcpd. The well will be hookedup to the South Batra production facilities immediately. The rig has now movedto drill the Biyala No.1 exploration well. The Turbay No.1 sidetrack encountered the top reservoir section at 6,396 ft,30ft higher than the Turbay No. 1 well, in a new sand with wireline logsindicating an overall dry gas column of 42 ft. The base of the sand was, asexpected, close to the gas oil contact seen in the straight hole. A net intervalof 18 ft was perforated and flowed at 10 MMcfpd plus 111 bopd on a 28/64thschoke at a well-head flowing pressure of 2,270 psi. The oil rate is expected toincrease and the gas rate to decrease when the well is put on production. The ECDC-1 rig has been moved to the Tummay No.1 location and has alreadydrilled to a depth of 5,031 ft encountering the top Sidi Salim at 5,003 ft. ThePliocene section will now be logged prior to running casing and then drillingthe Sidi Salim formation where the target may be oil. Mud logs are indicating apotential 40 ft gas reservoir interval in the Pliocene section at 3,400 ft. On the West Khilala No.1 discovery well, a 14 km tie-line is being built to anexisting pipeline already connected to the South Batra plant facilities. Theinitial production rate is expected to be 30 MMcfpd of dry gas with a further 30MMcfpd expected from the planned West Khilala No.2 well. Interpretation of thewell test data from the discovery well is indicating that the recoverablereserves could be well in excess of 150 Bcfe and a third well at West Khilala isnow being proposed. In view of these recent discoveries and taking account of wells currentlywaiting to go on production, current gross production of around 62 MMcfpd and450 bpd is expected to increase to over 180 MMcfpd and 2,800 bpd by mid-2006. Commenting on this, Robert Adair, Chairman, said: "The West Dikirnis discovery represents another sizable reserves addition andthe high condensate yield will also contribute significantly to our oilproduction. The identification of further seismic anomalies on trend with thisdiscovery along the fault system is very encouraging. In the Sidi Salim oil play in the south all four wells drilled have nowencountered the target hydrocarbon column. Further wells and some productionperformance data will be required to establish the full reserve potential alonga trend which extends southwards into our South East El Mansoura Concession. The next wells to be drilled using the deep rigs, the Biyala and the North Agawells, are higher risk wells testing new play types. The Biyala No.1 will test aMiocene Qawasim target in the northwest of the concession and the North Aga No.1will test an Abu Madi "pinch-out" in the southwest of the concession. It is very significant that the initial interpretation of the new 3-D seismicdata which we have been acquiring over the last fifteen months is beingreflected in our recent exploration success. We are now able to target prospectswhich are deeper and larger than the more obvious but relatively small Plioceneanomalies. We will now be extending our interpretation of the new 3-D seismicover the east of the concession where a large area is still relativelyunexplored. I expect our exploration programme to gain further momentum and I amconfident of continuing exploration success in 2006." For further information please contact: Melrose Resources plcRobert Adair, Chairman 0184 553 7037David Curry, Chief Executive 0131 221 3360Munro Sutherland, Finance Director 0131 221 3360 Chris Thomas, Corporate Development Director 0207 462 1603 Buchanan CommunicationsTim Thompson 0207 466 5000Ben Willey or visit www.melroseresources.com Glossary:MMcfpd - million cubic feet per daybpd - barrels of oil or condensate per daybcpd - barrels of condensate per daybopd - barrels of oil per dayBcfe - billion cubic feet of gas equivalent This information is provided by RNS The company news service from the London Stock Exchange