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Successful Kaliakra Appraisal Well in Bulgaria

11th Aug 2009 07:00

RNS Number : 1989X

Melrose Resources PLC

11 August 2009

FOR IMMEDIATE RELEASE

11 August 2009

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.

The results indicate that the Kaliakra field’s most likely reserves are 57 Bcf (of which 16 Bcf were included in the Company’s 2008 year end reserves booking). The well results also have a positive impact on the other field discoveries and exploration prospects on the Galata/Kaliakra geologic trend. In particular, they help to further confirm the Kavarna field reserves of 24 Bcf and effectively de-risk the undrilled Kavarna East structure which lies directly between Kavarna and Kaliakra and contains estimated reserves of 19 Bcf.

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.

In parallel, following recent positive correspondence from the Government, the Company is also in the process of engaging with the new administration to progress the various agreements required to commence the Galata gas storage project.

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."

For further information please contact:

Melrose Resources plc
David Thomas, Chief Executive Diane Fraser, Finance Director	0131 221 3360

Buchanan Communications Limited
Ben Willey Ben Romney	0207 466 5000

or visit www.melroseresources.com

Glossary:

Bcf - billion cubic feet of gas

This information is provided by RNS

The company news service from the London Stock Exchange

END

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