Melrose Resources Announces 2004 First Half Results

Melrose Resources announces its interim results for the six months to June 30, 2004.


Financial Summary

  • Turnover increased by 125% to £7.90 million (2003: £3.50 million);
  • EBITDA increased by 336% to £5.59 million (2003: £1.28 million);
  • Profit before taxation of £3.4 million (2003: £0.1 million);
  • EPS 1.99p (2003: loss per share 0.98p);

  • Operational Developments

  • 170% increase in production to 3,148 boepd (2003: 1,166 boepd);
  • Current production approximately 13,000 boepd;

  • Egypt

  • Appraisal and development program on South Batra field continuing with 4 development wells drilled in period;
  • Aga No.1 exploration well success;

  • Bulgaria

  • First gas produced from Galata Gas field on 5 June 2004;
  • Second gas sales contract entered into for Galata gas;
  • Current field production rate 60 MMcfpd;
  • Block Kaliakra 99 license extension for 2 years;

  • USA

  • 12 new wells drilled and completed on the Jalmat and Artesia fields;
  • 500 Mboe added to 'proved developed producing' reserves;

  • Completion of 2 Share Issues provided additional working capital.

  • In February 2004, 6.25 million shares issued through a Placing raising £10.7 million net of expenses
  • In July 2004, 6.8 million shares issued through a Placing and Open Offer raising £13.9 million net of expenses

  • Outlook for remainder of 2004

  • Two exploration wells scheduled in Bulgaria;
  • Extensive 3-D seismic program over Blocks 91-III and Kaliakra 99;
  • Ongoing development of South Batra field;
  • Step up in Egyptian exploration drilling program with a third drilling rig contracted;
  • Ongoing development of US assets with 10 development wells planned;

  • Commenting on the results, Robert Adair, Chairman said:

    'I am delighted that the progress made by Melrose over the last 18 months is now being reflected in notably improved financial performance. I expect a further significant improvement in the second half of 2004 which will include a full contribution from production from the Galata Gas Field.

    The activities of the Group in the first half of the year focused on bringing the Galata Gas Field on production and the ongoing development of the South Batra field. We are delighted to have achieved the milestone of first gas production from Galata and to have secured a second gas sales contract which has enabled us to increase production above the rates originally planned. The South Batra development is on target to achieve gross production of 100 MMcfpd in January in 2005.

    We have a busy period of exploration activity ahead. The El Mansoura 3-D seismic acquisition is ongoing and the arrival of the third drilling rig will allow us to step-up drilling activity in Egypt. A major 3-D seismic acquisition in Bulgaria starts in September with two exploration wells scheduled for September and October. I believe that the Group has assembled a portfolio of exploration prospects which is underpinned by relatively low-risk drilling but which offers significant upside.'