Melrose to Raise Funds for Acquisition of Merlon Petroleum

Melrose Resources plc (LSE:MRS), announces the proposed Placing and Open Offer of up to 22,691,476 new Ordinary Shares at 330p per share to raise approximately 75 million (before expenses).

On April 13, 2006, the Board announced that the Company had entered into a conditional agreement to acquire Merlon Petroleum for a cash consideration of $265 million (adjusted for net working capital less debt) subject to, inter alia, shareholder approval ('the Acquisition'). The Placing and Open Offer will give Melrose a suitable capital structure for its enlarged operations, allowing for the acceleration of its exploration and development activities. On successful completion of the Acquisition, Melrose will own a 100% working interest in all of the Egyptian concessions and development leases in which it currently has an interest.

In view of their respective sizes, the Acquisition and the Placing and Open Offer are each conditional upon the approval of shareholders which is to be sought at the EGM.

Bell Lawrie is the Sponsor and Joint Broker to the Company. Numis Securities is the Joint Broker to the Company.


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