Melrose Enjoys Third Success on South Batra Field in Egypt

Melrose Resources announces the successful test of the third well on the South Batra gas field, onshore Nile Delta, Egypt.

The South Batra No.3 appraisal well was spudded on January 28th and reached a total measured depth of 11,000 ft in the Late Miocene formation. An 88 ft section of Abu Madi Level III reservoir was encountered and a 42 ft interval was perforated and tested at a maximum rate of 17.7 MMcf of gas and 217 barrels of condensate per day on a 40/64inch choke.

Gross field proved plus probable reserves in the South Batra field are estimated at approximately 500 Bcfe. Further appraisal/development wells are scheduled in 2004 in order to raise field production to 100 MMcfpd in 2005.

The drilling rig has now moved and has spudded an exploration well at the Aga No.1 location in the South Mansoura Development Lease located to the south of the South Batra field. The well is designed to test both the Pliocene Kafr El Sheikh and the Miocene Abu Madi formations. An additional 270 km(2) of 3D seismic data will be acquired commencing mid-April in the South Mansoura area.

A second drilling rig is expected to arrive in May to continue the appraisal/ development drilling program over the South Batra field: a total of up to 14 wells are anticipated on the structure.

Melrose holds a 50% interest in the South Batra field through its wholly-owned subsidiary, Odyssey Petroleum (El Mansoura) Limited.

Commenting on the news, Robert Adair, Chairman, said:

'We are very pleased that the three locations selected on 2-D seismic on South Batra have been successful. The initial results of the new 3-D seismic are confirming our interpretation of the structure and will help optimise the development of the field. We look forward to the continuing exploration program on the El Mansoura Concession.'