Management Resource Solutions Regulatory News (MRS)

4 Jan 2008 11:15

Melrose Resources PLC04 January 2008 FOR IMMEDIATE RELEASE 4 January 2008 MELROSE RESOURCES PLC ("Melrose" or "the Company") United States update Melrose Resources plc (LSE:MRS), the oil and gas exploration, development andproduction company, today provides an update on its exploration and developmentactivities in the United States. East Texas exploration The Company's exploration and appraisal drilling programme near Lake Houston,East Texas, has commenced with the successful drilling of the Johnson No.1appraisal well on the Van Riet field. The well was drilled into an untested fault compartment to the east of the mainfield area and encountered 48 feet of net gas pay in the main Van Rietformation. Open hole log and downhole sample data indicate that the formation isproductive and the well will be tied back to the local gas transmissioninfrastructure for immediate production. The net proved plus probable reservesestimate for the well is approximately 4 billion cubic feet of gas ("Bcf"). The drilling programme will continue in late January with the drilling of theHolmes No.4 appraisal well, which is located on the undrilled western flank ofthe Holmes structure, 1.4 kilometres west of the crestal production wells. TheHolmes No.4 is targeting net unrisked reserves of 9 Bcf and has an estimatedchance of success of 44%. Plans are also being prepared to drill an exploration prospect in the Wilcoxformation on the Company's acreage in the area around mid year. The prospect hasestimated net reserves potential of approximately 30 Bcf and a chance of successof 20%. Permian Basin development projects Melrose is planning to invest approximately $50 million over the next two yearsto pursue infill drilling and waterflood projects in its Permian Basin fieldswhich are located in West Texas and East New Mexico. The projects are initiallytargeting the development of 11 million barrels of net proved undeveloped oilreserves and are also expected to result in reserves increases. Investment in the projects has already commenced with various facilities andflow line upgrades and a drilling rig is being contracted to start a continuousdrilling programme on the Jalmat field in late January. A second rig will becontracted to commence work on the Turner Gregory field before mid year withdrilling on the Artesia field planned to commence in late 2008. The development projects will involve the drilling of approximately 120 newproduction or injection wells with around 40 well conversions. When theinvestment programme is complete, the average well spacing in all the fieldswill be approximately 20 acres with fully defined pattern waterfloods in placethroughout out the development leases. Commenting on the above, David Thomas, Chief Executive, said: "We are very pleased with the results from the first well in the Company'sdrilling programme in East Texas, where additional reserves have significantvalue due to the strong gas prices currently being experienced in the US. Thereis considerable upside potential in this area. We are also looking forward to starting the infill drilling and secondaryrecovery programme to further develop our Permian Basin oil reserves and Melrosewill be pursuing this project with vigour. Elsewhere, our current exploration and appraisal well programmes in Egypt andBulgaria are progressing as planned and we expect to provide an update on theseover the next week or two." 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 CommunicationsTim Thompson 0207 466 5000Ben WilleyNick Melson This information is provided by RNS The company news service from the London Stock Exchange