Melrose's Egyptian gas fields go online

Dec 12, 2003 01:00 AM

Melrose Resources, the Edinburgh-based oil and gas firm, said it has begun production at two gas fields in Egypt, just ten months after the discoveries were first made. The firm, headed by CEO David Curry, also said it was in discussions to obtain debt finance for a "significant" increase in exploration and development spending in Egypt.
Production from Melrose's first well in the South Batra development was running at 30 mm cfpd and 500 bpd of condensate. A second development well at South Batra is being drilled and is scheduled to go into production before the end of next month.

Melrose said it has agreed a gas sales rate of 30 mm cfpd for next year, while further development wells are scheduled in order to raise production at the field to 100 mm cfpd by 2005. In total, the firm estimates there are around 500 bn cfe at South Batra.
First production has also been achieved at its one-well development at Mansouriya, where current production is 10 mm cfpd. A large number of leads are beingconfirmed at the El Mansoura Concession, and initial seismic work has suggested the South Mansoura area has similar reserve potential overall as the South Batra discovery.

But Mr Curry said a well at the Qantara Concession, in which Melrose has a 46 % stake, had failed to find commercial volumes of gas and has therefore been plugged and abandoned.
"The focus of activity on the concession will now move to the shallower Pliocene horizon where a number of exploration prospects similar to the discoveries made on the El Mansoura concession have been identified," he added.

Melrose chairman Robert Adair welcomed the announcement and said it was "excellent news" the firm has achieved first production on two fields within ten months of the discoveries being made.
He added: "A total of five development and appraisal wells and up to eight exploration wells are planned next year, which promises to be very exciting for us."
In September, Melrose reported a 352 % jump in earnings before interest, tax, depreciation and amortisation to £ 1.7 mm, boosted by higher oil prices and increased production.

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