Management Resource Solutions Regulatory News (MRS)

24 Apr 2008 11:04

Melrose Resources PLC24 April 2008 FOR IMMEDIATE RELEASE 24 April 2008 MELROSE RESOURCES PLC Egyptian Operations Update Melrose Resources plc (LSE:MRS) ("Melrose" or "the Company"), the oil and gasexploration, development and production company, today provides an update on itsEgyptian operations. Production Melrose's net entitlement production from the El Mansoura and South East ElMansoura concessions during the first quarter 2008 averaged 14,890 boepd,comprising 69% gas and 31% hydrocarbon liquids. The average production ratereflects strong contributions from the West Khilala and West Dikirnis fields,which are currently producing at gross rates of 103 MMcfpd of gas and 10,000 bpdof oil, respectively. The increasing Egyptian output has allowed the Company to achieve a new net peakproduction rate at a group level of 22,400 boepd during the quarter. Thiscompares favourably with the 2008 production guidance of 20,000 boepd whichremains unchanged. Developments Government approval has been received for the development of the South Zarqa andNorth East Abu Zahra fields which were discovered in late 2007. These fieldscontain combined gross reserves of approximately 59 Bcf of gas and 1.2 MMbbls ofliquids which will be produced via a common 35 kilometre, 10 inch flow line tiedback to the existing South Batra facilities. First production is expected earlyin the second quarter 2009. Exploration East Abu Khadra No.1 Operations have been completed on the East Abu Khadra No.1 exploration wellwhich was drilled using the EDC-9 rig to test an Abu Madi prospect in thenorthern area of the El Mansoura concession. As previously announced, the wellencountered 38 feet of net pay and has estimated gross reserves of 17 Bcfe.During flow testing the well produced 13.0 MMcfpd of gas with 182 bpd ofassociated condensate and plans are now being prepared to tie back the well tothe South Batra facilities for production in late 2008. The EDC-9 rig has now moved location and commenced operations in the Qantarafield, where it is being used to sidetrack the shut-in Qantara No.4 productionwell. It will then be used to drill the North Dikirnis No.1 exploration well ona Qawasim prospect which is located to the north of the West Dikirnis field andhas unrisked reserves potential of 36 Bcfe with an estimated chance of successof 30%. Damas No.1 The Damas No.1 exploration well has been drilled on a Sidi Salim prospect in thenorthern area of the South East El Mansoura concession using the ECDC-1 rig. Thewell encountered the top reservoir at 5,115 feet and found threehydrocarbon-bearing intervals with a combined gross gas column of approximately124 feet. Open hole logs indicate a net pay interval of 61 feet with an averageporosity and water saturation of 25% and 28%, respectively. The well was flowtested at a rate of 14.3 MMcfpd of gas with 105 bpd of condensate and thediscovery reserves are estimated to lie in the range 8 Bcfe to 10 Bcfe. The rig will shortly be moved to drill the East Sindy No.1 exploration well on acombined Sidi Salim and Oligocene prospect with unrisked reserves potential of65 Bcfe and an estimated chance of success of 30%. South Aga No.1 The South Aga No.1 exploration well has been drilled with the EDC-53 rig on anAbu Madi channel sand prospect in the south of the El Mansoura concession. Thewell reached a total depth of 8,710 feet and open hole logs indicated a net sandinterval of 511 feet in the Abu Madi formation but with no commercialhydrocarbon shows. The well will be plugged and abandoned. Ar Rub No.1 The Ar Rub No.1 exploration well is being drilled with the EDC-54 rig in theSouth East El Mansoura concession. The well has reached a depth of 8,190 feetand is currently drilling ahead approximately 1,950 feet above the target SidiSalim sand interval. The prospect has unrisked reserves potential of 90 Bcfewith a chance of success of 25%. Seismic Acquisition Melrose's 2008 Egyptian seismic acquisition programme commenced on the 9 March2008 and to date 430 kilometres of 2-D data has been acquired, with 3-Dacquisition scheduled to commence shortly. The seismic data is being acquired over the South East El Mansoura concessionwhich contains an extension of the geologic trends identified on the El Mansouraconcession, in particular in the Sidi Salim formation. In addition, theconcession contains other geological trends which appear to be more analogous tothe Egyptian Western Desert. The primary purpose of the seismic acquisition isto provide data for a detailed block evaluation and to identify Cretaceous andJurassic prospects for drilling in 2009. Commenting on the above, David Thomas, Chief Executive, said: "We are very pleased with the production performance of our Egyptian fieldsduring the first quarter of the year and the speed with which we receivedGovernment approval for the new South Zarqa and North East Abu Zahradevelopments. We are also encouraged by the well test results on East Abu Khadraand the Damas discovery, which suggest that they are both candidates for earlyproduction tie-back." For further information please visit www.melroseresources.com or contact: Melrose Resources plcDavid Thomas, Chief Executive 0131 221 3360Robert Adair, Executive ChairmanMunro Sutherland, Finance Director Buchanan CommunicationsBen Willey 0207 466 5000Nick Melson Glossary: Bcf - billion cubic feet of gasBcfe - billion cubic feet of gas equivalentbpd - barrels of oil or condensate per daybopd - barrels of oil per dayboepd - barrels of oil equivalent per dayMMbbls - million barrels of oil or condensateMMcfpd - million cubic feet per day This information is provided by RNS The company news service from the London Stock Exchange