Melrose Resources plc reported that the results of recent exploration drilling and a planned development project in Bulgaria.
Following the announcement of the award to Melrose of the Block Galata exploration concession, Melrose has drilled the Galata E3 - Kaliakra exploration well using the Atwood Cross drilling rig. The well was drilled to test a structural feature similar to that at the nearby Galata gas field, with the main reservoir target in a Palaeocene-aged formation. The well intersected the top reservoir at a measured depth of 2743 feet and found a gross hydrocarbon column of 46 feet. Open hole log data indicates a net pay interval of 33 feet with an average porosity of 31% and high gas saturations. Due to the high quality of the reservoir, flow testing was not required and the well has been suspended for use as a production well.
Plans are now being formulated for the development of the field using a subsea completion and tying the well back approximately 15 kilometres to the Galata platform production facilities. The objective is to achieve production from the well no later than mid 2009.
Based on the open log data, the reserves in the immediate vicinity of the well are estimated at 7 billion cubic feet ("Bcf") and there is additional upside in the field of over 40 Bcf if a shale-filled channel to the east of the structure acts as an effective seal. Based on seismic mapping and regional analogues, the estimated chance of success for the upside reserves case is 50%. The total field size will become clear after a period of production. Further exploration potential also exists on trend with the discovery in three structural prospects which have combined unrisked reserves of 31 Bcf with an average chance of success of 45%.
As mentioned in the previous press release dated 7 December 2007, Melrose expects to reduce its working interest in the Block Galata to around 60%.
Commenting on this, David Thomas, Chief Executive, said, "We are very pleased to have made a new shallow water discovery in Bulgaria and to have proved up an extension to the productive Galata reservoir trend. The new flow line installation will allow us to rapidly develop the reserves using our existing offshore and onshore facilities and to access the economic upside potential in both the discovery and offsetting prospects."
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