Melrose is 100% owner and operator of the Galata gas field, offshore Bulgaria in the Western Black Sea. In addition, Melrose has a 100% working interest in four exploration concessions offshore Bulgaria covering a total of over 10,000 kmē. Melrose will shortly commence a drilling program of three firm and two optional wells to be drilled by the semi-submersible drilling rig, the Atwood Southern Cross. The rig is currently drilling in Turkish waters of the Black Sea and Melrose has agreed that the rig will drill one further well for its current operator before mobilising to Bulgarian waters. This new schedule has the advantage for Melrose of reducing the risk of weather delays as the drilling moves away from the winter months. The rig is expected to be on location for Melrose by late March and will drill the planned wells sequentially.
The first well will be the Izgrev No.1exploration well, located in Block Bourgas Deep. The well will be the first to be drilled in this area of the Black Sea. The prospect is located approximately 60 km offshore in water depths of approximately 300 m. The reservoir target is a Miocene channel sealed by Pliocene shales.
The second well will be the Obzor No.1 located in Block Kaliakra 99 approximately 60 km offshore Bulgaria at water depths of approximately 650 m. The location is approximately 35 km to the east of the Galata gas field. The target is a potentially gas-filled sandstone reservoir of Pliocene age. The development of a discovery in this area would be able to make use of the production infrastructure that is in place at the Galata field.
The third well will be the Ropotamo No.1 exploration well, located in Block Rezovska approximately 45 km east of the Bulgarian coast in water depths of approximately 160 m. Ropotamo is a multi-target prospect with the main target being a potential sandstone reservoir interval in the Oligocene. Ropotamo No.1 will be the first well to be drilled in this region of the Black Sea.
The table below summarises the well depths, target prospect sizes and the estimated probability of success of each of the three firm wells as follows:
P50 Hydrocarbons-in-place Well name Total Gas Oil Chance of depth(ft) case(Bcf) case(MMbbls) Success Izgrev #1 4,700 278 308 21% Obzor #1 5,080 158 -- 20% Ropotamo #1 5,680 1,391 1,540 14%
Note that where both gas and oil potential is shown, these are alternative cases.
Depending on drilling results, up to two further wells may be drilled. One well may test the Kamchia prospect which is located close to the Obzor prospect in the south-east area of Block Kaliakra 99 at water depth of approximately 460 m. Kamchia is a multi-target prospect with potential sandstone reservoirs throughout an interval in the Pliocene. The primary target on the Kamchia prospect has P50 GIIP of 172 Bcf with a chance of success of 18%. A further option well may be used to drill an offset prospect to a discovery or an appraisal well.
If drilled, the Kamchia No1 well will be the second test of a Pliocene play fairway following the Obzor No1. Although the individual potential for these two prospects is not large, there are a large number of follow-up accumulations providing a total GIIP of between 681 Bcf (P90) and 1.5 Tcf (P10). The total mean GIIP for these prospects is 1.0 Tcf. The Obzor No1 well is targeting the lowest risk prospect and, if successful, will reduce the risk of the adjacent prospects.
Commenting on the planned exploration program, Robert Adair, Executive Chairman, said:
"I believe that the planned drilling program offers are a very attractive balance between risk and reward. Success in one or more of these prospects would have a major impact on Melrose with the benefit lying not just in the intrinsic value of the discovery itself but also in the effect it would have on the prospectivity of our concessions. The drilling program is the culmination of a major effort by our exploration team in acquiring and interpreting seismic and other scientific data and in generating and evaluating prospects on our acreage. The next few months promise to be very exciting for Melrose."
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