Melrose Finds Gas with South Batra-4 Well in Egypt

Melrose Resources reports the drilling results for the appraisal and development drilling program in the South Batra field area, onshore Nile Delta, Egypt.

The South Batra No.4 appraisal well was spudded on 18 July and reached a total measured depth of 12,414 ft in the Miocene (Qawasim formation). The main target in the well was the Abu Madi Level IIIA and the entire reservoir section was cored. A 120 ft gross section of good quality, gas bearing reservoir was encountered and three intervals between 9,730 and 9,850 ft totaling 58 ft were perforated. The well was cleaned up and temporarily shut in. During drilling, the well encountered significant gas shows in the deeper Qawasim formation below 11,000 ft and the well was deepened to 12,414 ft from the original 11,500 ft. Three deeper intervals were perforated and tested but did not flow.

The South Batra No.15 appraisal well was spudded on 29 July and reached a total measured depth of 10,500 ft in the Miocene (Qawasim formation) having drilled through the Abu Madi. The main target in the well was the Pliocene section offsetting the Mansouriya No.1 well. A 152 ft gross section of Pliocene reservoir was encountered. Several Pliocene intervals were cored and three intervals totaling 64 ft were perforated. The well was gravel-packed, completed and temporarily shut in.

Both the No.4 and No.15 wells will be tested and produced into the South Batra production facilities in the next few weeks, after the tie-in flow lines have been completed. On the basis of log evaluation, the South Batra No.4 is expected to produce at over 10 MMcfpd while the South Batra No.15 well should produce at over 15 MMcfpd. A clearer indication of the reserves attributable to these wells will be established after the production test.

The EDC 9 rig has now moved to the South Batra No.7 location and the SF 104 rig is moving to drill the South Batra No.6 well. This well is a side-track from the South Batra No.2 surface location and will be drilled under the river Nile. In addition a third drilling rig, the ECDC 1, has been contracted and spudded the Qantara No.9 well on 21 September. The target in this well is a Pliocene (Lower Kafr el Sheikh) section at 4,450 ft, which is analogous to the successful Pliocene play on the El Mansoura Concession, with a second shallow target at 2,300 ft.

Commenting on this, Robert Adair, Chairman, said:

'We are pleased to announce that the latest two wells in the South Batra area have been successful and will be on production before year-end. Additionally, while the testing of the deeper Qawasim interval in the South Batra No.4 well did not produce gas, the very high background gas shows gives us hope that we are on the verge of opening up a new deeper play. The additional third drilling rig will focus on our exploration drilling program, initially targeting the lower-risk Pliocene play on both the Qantara and El Mansoura Concessions. We are looking to contract a fourth drilling rig around the end of the year to further step-up activity. The ongoing 3-D seismic acquisition program has identified a large number of Pliocene prospects. The excellent performance of the Mansouriya No.1 well and the high drilling success rate that we have achieved to date on this play suggest that production from this formation could be increased significantly as we go into 2005.'