22nd Jan 2009 07:00
FOR IMMEDIATE RELEASE
22 January 2009
Melrose Resources plc
Operational Update
Melrose Resources plc (LSE: MRS) ("Melrose" or "the Company"), the oil and gas exploration, development and production company, today provides an update on its drilling and production operations in Egypt and the United States.
Egypt
The West Dikirnis No.7 horizontal development well has been placed on production and is flowing 3,000 bpd of oil with 4.4 MMcfpd of gas on a 36/64 inch choke. The well's flow rate is currently being restricted to gather well and reservoir performance data prior to potentially increasing the production rate.
The EDC-9 rig is currently drilling the second horizontal development well in the West Dikirnis field, West Dikirnis No.10, which has reached a depth of 9,110 feet. In addition, the EDC-54 rig is preparing to drill the first horizontal production well in the Tamad field, Tamad No.5, where there is the potential to add in excess of 1.0 MMbbls of oil reserves using horizontal well drilling technology.
The East Dikirnis No.1 exploration well has been successfully drilled with the EDC-54 rig to test a Qawasim formation prospect located approximately 11 kilometers to the east of the West Dikirnis field. The well encountered 38 feet of gas overlying an 11 feet thick oil rim with an average porosity of 23 percent. The estimated discovery volume is in the range 10 Bcfe to 12 Bcfe and the well has been temporarily suspended for possible future sidetracking and use as a production well.
The East Abu Khadra gas field was brought on stream via the South Batra facilities on 23 December 2008 and is currently flowing at 7.9 MMcfpd of gas and 125 bpd of condensate.
United States
The East Texas Nunan No.1 exploration well spudded on 15 January 2009 and has reached a depth of 3,485 feet. The well is targeting a number of different pay zones including a shallow oil prospect with unrisked reserves of 3 MMbbls and a chance of success of 29 percent and three deep gas prospects with combined unrisked reserves of 99 Bcf and an averaged chance of success of 21 percent. The planned Ramsey No.1 exploration well has been deferred to take advantage of an anticipated reduction in US drilling rig and services rates.
Commenting on the update, David Thomas, Chief Executive said:
"We are pleased with the results from East Dikirnis No.1 which confirm the presence of further oil rim accumulations in the Mansoura concession and we shall be evaluating development options for the discovery over future months. We also look forward to progressing the Nunan No.1 exploration well in East Texas which will test a number of different reservoir horizons."
For further information please contact
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Melrose Resources plc
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Robert Adair, Executive Chairman
David Thomas, Chief Executive
Diane Fraser, Finance Director
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0131 221 3360
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Buchanan Communications Limited
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Ben Willey/Ben Romney
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0207 466 5000
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or visit www.melroseresources.com
Glossary:
Bcf - billion cubic feet of gas
Bcfe - billion cubic feet of gas equivalent
bpd - barrels of oil or condensate per day
MMbbls - million barrels of oil or condensate
MMcfpd - million cubic feet of gas per day
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