Melrose Delays Production from Galata Field Until May

Melrose Resources reports that the offshore platform and facilities and all onshore pipelines and process facilities at the Galata field development located in the shallow waters of the Baltic Sea have been completed. However, during final pressure testing of the offshore pipeline a minor leak was detected when the line was pressured to its full operating pressure of 125 bar (1,875 psi). It has taken a few days to identify the precise location of the leak, which was finally pinpointed on April 20th. Steps are now being taken to make the repair, which Melrose believes is the financial responsibility of the pipeline contractor. Inevitably the repair will take some time but every effort is being made to have the field on production as soon as possible: first production is now targeted for late May.

Commenting on this, Robert Adair, Chairman, said:

'The short delay caused by the need for this repair is frustrating, especially having suffered an earlier delay to the offshore line caused by storm damage. However, there is little impact on the fundamental economics of the Galata project. The development will have been completed in less than fourteen months which is a considerable achievement by our project team.

The completion of the project will also open up the considerable potential of the further exploration opportunities both on the Galata trend, where potential reserves vary from 50 to 100 Bcf, and also in the channel play in the south of Block 91-III and Block Kaliakra 99, where potential reserves are well in excess of 1 Tcf . We intend to test both of these plays with exploration wells planned for the third quarter of this year.