Management Resource Solutions Regulatory News (MRS)

25 Jan 2007 07:01

Melrose Resources PLC25 January 2007 FOR IMMEDIATE RELEASE 25th January 2007 MELROSE RESOURCES PLC Bulgarian exploration drilling programme Melrose Resources plc the oil and gas exploration, development and productioncompany today announces details of its planned exploration drilling programmeoffshore Bulgaria. Melrose is 100% owner and operator of the Galata gas field, offshore Bulgaria inthe Western Black Sea. In addition, Melrose has a 100% working interest in fourexploration concessions offshore Bulgaria covering a total of over 10,000 km(2).Melrose will shortly commence a drilling programme of three firm and twooptional wells to be drilled by the semi-submersible drilling rig, the AtwoodSouthern Cross. The rig is currently drilling in Turkish waters of the Black Seaand Melrose has agreed that the rig will drill one further well for its currentoperator before mobilising to Bulgarian waters. This new schedule has theadvantage for Melrose of reducing the risk of weather delays as the drillingmoves away from the winter months. The rig is expected to be on location forMelrose by late March and will drill the planned wells sequentially. The table below summarises the well depths, target prospect sizes and theestimated probability of success of each of the three firm wells as follows: P50 Hydrocarbons-in-place Well name Total depth (ft) Gas case (Bcf) Oil case (MMbbls) Chance of success Izgrev No.1 4,700 278 308 21%Obzor No.1 5,080 158 - 20%Ropotamo No.1 5,680 1,391 1,540 14% Note that where both gas and oil potential is shown, these are alternativecases. The first well will be the Izgrev No.1exploration well, located in Block BourgasDeep. The well will be the first to be drilled in this area of the Black Sea.The prospect is located approximately 60 km offshore in water depths ofapproximately 300 m. The reservoir target is a Miocene channel sealed byPliocene shales. The second well will be the Obzor No.1 located in Block Kaliakra 99approximately 60 km offshore Bulgaria at water depths of approximately 650 m.The location is approximately 35 km to the east of the Galata gas field. Thetarget is a potentially gas-filled sandstone reservoir of Pliocene age. Thedevelopment of a discovery in this area would be able to make use of theproduction infrastructure which is in place at the Galata field. The third well will be the Ropotamo No.1 exploration well, located in BlockRezovska approximately 45 km east of the Bulgarian coast in water depths ofapproximately 160 m. Ropotamo is a multi-target prospect with the main targetbeing a potential sandstone reservoir interval in the Oligocene. Ropotamo No.1will be the first well to be drilled in this region of the Black Sea. Depending on drilling results, up to two further wells may be drilled. One wellmay test the Kamchia prospect which is located close to the Obzor prospect inthe south-east area of Block Kaliakra 99 at water depth of approximately 460 m.Kamchia is a multi-target prospect with potential sandstone reservoirsthroughout an interval in the Pliocene. The primary target on the Kamchiaprospect has P50 GIIP of 172 Bcf with a chance of success of 18%. A furtheroption well may be used to drill an offset prospect to a discovery or anappraisal well. If drilled, the Kamchia No1 well will be the second test of a Pliocene playfairway following the Obzor No1. Although the individual potential for these twoprospects is not large, there are a large number of follow-up accumulationsproviding a total GIIP of between 681 Bcf (P90) and 1.5 Tcf (P10). The totalmean GIIP for these prospects is 1.0 Tcf. The Obzor No1 well is targeting thelowest risk prospect and, if successful, will reduce the risk of the adjacentprospects. Commenting on the planned exploration programme, Robert Adair, ExecutiveChairman, said: "I believe that the planned drilling programme offers are a very attractivebalance between risk and reward. Success in one or more of these prospects wouldhave a major impact on Melrose with the benefit lying not just in the intrinsicvalue of the discovery itself but also in the effect it would have on theprospectivity of our concessions. The drilling programme is the culmination of amajor effort by our exploration team in acquiring and interpreting seismic andother scientific data and in generating and evaluating prospects on our acreage.The next few months promise to be very exciting for Melrose." For further information please contact: Melrose Resources plcRobert Adair , Executive Chairman 0778 427 7244Munro Sutherland, Finance Director 0131 221 3360 Buchanan CommunicationsEric Burns 0194 388 3990Ben Willey 0207 466 5000 or visit www.melroseresources.com Glossary:Bcf - billion cubic feet of gasGIIP - gas initially in placeMMbbls - million barrels of oilTcf - Trillion cubic feet of gas This information is provided by RNS The company news service from the London Stock Exchange