Management Resource Solutions Regulatory News (MRS)

11 Aug 2009 07:00



 Melrose Resources plc

Successful Kaliakra Appraisal Well in Bulgaria

Melrose Resources plc (LSE: MRS) ("Melrose" or "the Company"), the oil and gas exploration, development and production company, today provides an update on its appraisal drilling and development activities in Bulgaria.

Drilling

The Kaliakra No.2 well has been successfully drilled to appraise the Kaliakra gas discovery which is located approximately 15 kilometres east of the Melrose operated Galata field production platform. The well was drilled approximately 1.8 kilometres to the west of the original Kaliakra No.1 discovery well using the Prometeu jack-up drilling rig.

Kaliakra No.2 penetrated the top of the Paleocene reservoir interval at a depth of 2,679 feet and encountered 67 feet of net gas pay, which is substantially thicker than the net pay of 31 feet found in the Kaliakra No.1 well. The open hole logs and down hole gas samples obtained from the well have confirmed that the reservoir has very good properties, with an average porosity in excess of 30 percent  high gas productivity. Given the quality of the reservoir, it was not necessary to run flow tests in the well and it has been temporarily suspended for future use as a development well. 

Developments 

The incoming Bulgarian Government has now appointed a new Council of Ministers, including the Minister for Economy, Energy and Transport and the Minister for Environment and Waters. It is therefore anticipated that the Government will shortly be able to grant Melrose approval to complete the Kavarna field development as a subsea tie-back to the Galata platform. A submission is also being prepared to solicit Government consents for the Kaliakra field development which will be tailored to facilitate the future tie-in of the Kavarna East reserves. 

Commenting on the update, David Thomas, Chief Executive said:

"We are very pleased with the results from the Kaliakra appraisal well which confirm our geologic model for the area and effectively increases the most likely combined reserves estimate for Kavarna, Kavarna  East and Kaliakra to 100 Bcf. This is approximately one and a half times the size of the Galata field reserves produced between 2004 and 2009. 

"Beyond these three structures we still have two other exploration prospects to drill on the same geologic trend and we plan to acquire further 3D seismic data in early 2010 to the north of the trend where we believe the same Palaeocene exploration play may be present."

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Glossary:

Bcf - billion cubic feet of gas