British Melrose Resources Plans $78 Mln Investment in Bulgaria, $20.6 Mln in Romania

Some $51.0 million of the projected investments in Bulgaria will be allocated to the Kavarna and Kaliakra field developments, while another $27.0 million is set for the development of the Galata gas storage project, the company said in a statement on Thursday.

In Bulgaria, the company plans to drill the East Kaliakra exploration prospect in mid-2010, while a jack-up drill rig is on location to complete the Kaliakra development well. The prospect is adjacent to the Kaliakra field and contains unrisked reserves of 59 Bcf (billion cubic feet) of gas.

The relative contribution of the company’s production in Bulgaria of the total output of the company is estimated to reach 17% in 2010. The forecast is based on production from the new Kavarna and Kaliakra field developments in Bulgaria, which are scheduled to come on stream in the second half of the year.

In November Melrose got a regulatory nod to develop the Kavarna gas field in northeastern Bulgaria with estimated reserves of 24 Bcf of gas. Melrose has also filed an application before the government in Sofia to develop the nearby Kaliakra gas field. The gas field is located 14 kilometres east of Galata gas field which the company plans to transform into a gas storage depot together with Bulgarian state-run gas monopoly Bulgargaz.

The company’s budget provides $20.6 million for the Romanian Ana and Doina field developments, contingent upon the receipt of government approvals to complete the planned farm-in to offshore Romanian concessions.

Melrose Resources envisages exploration drilling activity in Romania. The well, or wells, to be drilled will be selected from three good quality prospects, namely, Clara, Gasca and South East Midia which contain gross unrisked reserves potential of over 0.5 Tcf (trillion cubic feet) of gas and around 20 MMbbls (million barrels) of oil.

The company currently forecasts an average daily production rate in 2010 of 40,000 boepd (barrels of oil equivalent per day) on a working interest basis, which is approximately 4% higher than current 2009 market guidance of 38,500 boepd.

Melrose Resources (www.melroseresources.com) also drills in the U.S., Eqypt, France and Turkey.

($ = 0.6978 euro)