2009 Production, Reserves and Operational Update

FOR IMMEDIATE RELEASE 24 February 2010

2009 Year End Production and Reserves Report and Operational Update

Melrose Resources plc (LSE: MRS) ("Melrose" or "the Company"), the oil and gas exploration, development and production company, today reports annual production figures for 2009 and a summary of the Company's oil and gas reserves as at 31 December 2009. This information is provisional and unaudited and may be subject to further review.

2009 Production

Melrose's working interest production in 2009 totalled 63.7 Bcf and 3.47 MMbbl of oil and condensate, equating to an average daily production rate of 38.6 Mboepd. This is consistent with the Company's latest market guidance figure of 38.5 Mboepd, which was contained in the quarterly Interim Management Statement released on 18 November 2009.

The annual production rate represents an increase of 8.6 percent as compared to 2008. The improvement is due to the contribution of five new Egyptian fields which were brought on stream during the year, namely, South Zarqa, North East Abu Zahra, North Dikirnis, Damas and South Khilala.

On a net entitlement basis, Melrose's production in 2009 totalled 27.7 Bcf of gas and 1.59 MMbbl of oil and condensate and the average daily production rate was 17.0 Mboepd.

In Egypt, gross production totalled 62.1 Bcf and 3.24 MMbbl of oil and condensate, averaging 37.2 Mboepd. Melrose's net entitlement production totalled 26.1 Bcf and 1.36 MMbbls of oil and condensate, at an average rate of 15.6 Mboepd. Production from the Galata field in Bulgaria totalled 0.3 Bcf, at an average rate of 0.1 Mboepd. In the USA, Melrose's production totalled 1.3 Bcf of gas and 0.23 MMbbl of oil and liquids, at an average rate of 1.2 Mboepd.

The average realised prices received by Melrose during the year were as follows:

Proved and Probable Reserves

The Company's total proved and probable reserves at 31 December 2009 were 68.5 MMboe on a net entitlement basis, which equates to an annual reserve replacement ratio of 131 percent. A detailed breakdown of the reserves base by category and country is as follows:

The 2009 year end net entitlement proved plus probable reserves reflect the positive impact of reserves additions from the South Khilala discovery in Egypt (2.16 MMboe) and revisions to both the Kaliakra (5.54 MMboe) and Kavarna (0.87 MMboe) field volumes in Bulgaria, resulting from the successful Kaliakra appraisal well, and a revision to the East Texas probable reserves (0.97 MMboe).

They also reflect the impact of the increased annual production volume (6.20 MMboe) and a negative revision to the Company's net entitlement volumes in Egypt (1.89 MMboe), due to higher short term oil price assumptions, and various other less material reserves movements. There have been no material changes to the reserves assigned to the Company's main producing assets.

The above figures do not include reserves associated with the Ana and Doina gas fields offshore Romania, which will be added once the Company's interest assignment has been approved. On net basis the Company estimates that these fields contain probable reserves of 15.6 MMboe and this figure will be subject to an independent assessment prior to booking.

For completeness, on a working interest basis the Company's total proved plus probable reserves at 31 December 2009 were 131.4 MMboe. On the same basis and for reference, the booked proved plus probable reserves for the South Khilala, Kaliakra and Kavarna fields are 39 Bcf, 49 Bcf and 25 Bcf, respectively.

Discounted Net Present Value of Reserves

The Net Present Value of the Company's proved and probable reserves discounted at 10 percent per annum (NPV 10) at 31 December 2009 was as follows:

The NPV 10 value is based upon the following commodity pricing assumptions:

·; USA Oil price $70.0 per bbl constant throughout. Gas price $4.50 per Mcf in 2010

escalating to $5.50 per Mcf in 2014 and constant thereafter.

·; Bulgaria Gas price $6.20 per Mcf in 2010 escalating to $7.00 per Mcf in 2014 and

constant thereafter.

·; Egypt Oil and condensate price $70.0 per bbl constant throughout. LPG price $42.0

per bbl constant throughout. Gas price $2.65 per Mcf constant throughout for all concessions other than $2.95 per Mcf for East Abu Khadra, North East Abu Zahra and South Zarqa and $9.92 per Mcf for Qantara

The NPV 10 value is calculated on the basis of the above commodity prices and estimates of capital and operating costs with the resulting net cash flows being discounted at 10 percent per annum. The NPV 10 value is not necessarily an indication of the realisable market value.

Operational Update

Egypt

In Egypt, the South Damas No.1 discovery well has been flow tested at a rate of 14.3 MMcfpd of gas with small amounts of condensate and completed for production. As previously announced, the preliminary estimate of the discovered reserves is 30 Bcf and the field is expected to be brought on stream within six months via the nearby Damas field infrastructure. The well rate is expected to average in excess of 12 MMcfpd for the first year of production.

The West Dikirnis Phase II development activity is drawing to a close and commissioning activities have commenced on the gas re-injection facilities, with compression start-up due later this week.

The EDC-9 rig is currently preparing to spud the Tall Rak No.1 well which will test a Sidi Salim prospect in the South East Mansoura concession with gross unrisked reserves of 190 Bcfe and a chance of success of 34 percent.

Following the Tall Rak well, the EDC-9 rig will be used to recomplete the Salaka No.1 production well away from the depleted Abu Madi reservoir into a new untapped interval in the Kafr El Sheik reservoir. The new interval has a net gas pay of 27 feet and contains estimated reserves of approximately 3 Bcf. It is anticipated that the well will produce at an average rate of around 6 MMcfpd during its first year on production and reach payback within 4 months.

Elsewhere, the 2-D seismic survey on the 57,000 square kilometre Mesaha concession is underway and to date some 352 kilometres of data have been acquired in the south-western area of the concession. The preliminary interpretation indicates the presence of a strong shallow seismic reflector which suggests that the maximum depth of the sedimentary basin in this area of the concession may be around 3500 feet. The seismic data are, however, inconsistent with the available aero-magnetic and gravity data which indicate a deeper basin and further studies are required to resolve the apparent uncertainties. In the interim, the seismic crew will move to the north-western area of the concession to continue the regional survey.

Bulgaria

Melrose has signed a letter of intent with a Bulgarian gas trading entity, under which the Company will sell 4.24 Bcf of gas from the Kavarna field during the first year of the development. A proportion of the gas will be purchased in advance, with a cash payment of $10.2 million due prior to first production, and the remaining volume will attract the Published State price less adjustments. The Company expects to achieve an average gas sales price in excess of $6.50 per Mcf for the first year of production from the field, assuming that the Brent oil price averages over $70 per bbl in the near term.

Romania

In Romania, the Company remains cautiously optimistic that the assignment of its interests in the Pelican and Midia offshore concessions will be approved by the Government within the next month or two and on this basis is preparing to drill an exploration well in the third quarter of 2010. The well will test the Eugenia South oil prospect (formerly known as Gasca) in the Pelican concession and will be drilled to the Cretaceous formation to target the reservoirs which are productive in the nearby Lebada fields.

Commenting on this report, David Thomas, Chief Executive, said:

"It has been a good year for Melrose and we achieved a record production level of 38.6 Mboepd driven, in large part, by the successful fast-track development of a number of our recent Egyptian exploration discoveries. We were also very pleased to have finished the year with a net entitlement reserves replacement ratio of over 130 percent. It is significant that we have been able to more than replace our annual production volumes during a period when the exploration and appraisal drilling programme was somewhat reduced in response to the low oil prices experienced at the end of 2008 and early 2009."

For further information please contact:

or visit www.melroseresources.com

Note:

Proved and probable reserves are the estimated quantities of crude oil, natural gas and natural gas liquids which geological, geophysical and engineering data demonstrate with a specific degree of certainty to be recoverable in future years from known reservoirs and which are considered commercially producible. The figures are estimated on the basis that there should be a 90% probability that the actual quantity of recoverable reserves will be more than the amount estimated as proven and there should be a 50% probability that the actual quantity of recoverable reserves will be more than the amount estimated as proved and probable. The reserves stated are directors' estimates based upon evaluations by Company employees which have been reviewed by independent petroleum engineers.

Glossary:

bbl - barrel of oil, condensate or natural gas liquids

Bcf - billion cubic feet of gas

Mbbl - thousand barrels of oil, condensate or natural gas liquids

MMbbl - million barrels of oil, condensate or natural gas liquids

MMboe - million barrels oil, condensate or natural gas equivalent

MMcfpd - million cubic feet of gas per day

Mboepd - thousand barrels of oil, condensate or natural gas liquids equivalent per day

Mcf - thousand cubic feet of gas

MMcf - million cubic feet of gas

MMcfpd - million cubic feet of gas per day

MMcfe - million cubic feet of gas equivalent

Disclaimer

This announcement contains certain operational and financial information in relation to 2009 that is subject to final review and has not been audited. Furthermore it contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the oil and gas exploration and production business. Whilst Melrose believes the expectations reflected herein to be reasonable, the actual outcome may be materially different owing to factors either within or beyond Melrose's control, and accordingly no reliance may be placed on the figures contained in such forward looking statements.