Melrose Resources Updates Drilling Activities

Melrose Resources reports the results of recent drilling and development activity in all three areas of operation.


The Yuri Shimanov well on Block 91-III was spudded on September 20th and drilled to a depth of 2,335 ft, encountering the Oligocene, Eocene and Palaeocene horizons. While drilling, background gas indicated an active hydrocarbon system in the area, but no reservoir section in either the Oligocene or Eocene was confirmed. However, the carbonate reservoir of the Galata field was successfully identified and, in addition, 33 ft of excellent sandstone was found in the overlying Palaeocene horizons. As there were only minor gas shows the well was plugged and abandoned.

The 3-D seismic survey of 1,470 km(2) over the southern area of Block 91-III and Block Kaliakra 99 was completed on November 30th. Processing of the data has already started and results will become available through this winter. Further exploration activity will now be concentrated on the Galata area which includes the proposed Druzba well location.


The Qantara No.9 Pliocene exploration well was spudded on September 20th using the ECDC-1 rig and was drilled to a vertical depth of 3,792 ft. The well encountered gas shows in several thin intervals, but these were not considered to be commercially viable and did not warrant testing. The well was plugged and abandoned.

The ECDC-1 rig was moved to the El Mansoura Concession and the Mit Dafir Pliocene exploration well was spudded on 20 October. The well was drilled to a depth of 6,007 ft and encountered 20 ft of excellent, gas-bearing reservoir with very high porosity and low water saturation. In addition, two intervals, each around 100 ft gross thickness, of laminated sand and shale appear to be gas bearing and a full testing programme is now being finalised. The rig will move next to the South Bilqas location to sidetrack the existing well and then to the South Mansoura area to test the Shubra Prospect which has potential reserves of over 200 Bcf.

The EDC-9 rig spudded the South Batra No.7 appraisal well on September 19th. The well was drilled to a depth of 10,540 ft and the top of the Abu Madi Level III reservoir interval was encountered at 9,742 ft. A gross reservoir interval of 64 ft was confirmed and a 38 ft interval has been perforated and flowed at 12.5 MMcfpd for a brief period. The well will be production tested directly into the gas plant once the tie-in has been completed. This well also encountered a 10 ft gas bearing interval in the Pliocene sand which was also encountered in the Mansouriya and South Batra No. 4 wells. The rig will now move to the South Batra No.8 location. This well will be drilled to 8,000 ft to test the further extension of the Mansouriya Pliocene channel trend.

The SF-104 rig drilled the South Batra No.2A well, which is a sidetrack of the original No.2 well, to an updip location in the Abu Madi Level II reservoir. The No.2A well was drilled to a depth of 10,235 ft vertical depth. Due to the deviated hole, the logging tools had to be run on the drill pipe and only basic logs were obtained. A production liner is being run and the zones of interest will be tested.

The 3-D seismic acquisition program over the west-central area of the El Mansoura Concession is continuing and phase 11 (of 14) of the survey is now active. Over 1,000 km(2) of 3-D seismic has now been acquired with the final area now expected to total 1,700 km(2). The initial processing has shown up a number of extensive Pliocene channel systems analogous to that encountered in Mansouriya, with up to three stacked channel systems at some locations. The Shubra Prospect is the first well that will be drilled in a planned 17-well Pliocene evaluation programme in the South Mansoura and South Batra areas.


The monthly revenues in the United States exceeded $1.0 million for the first time in August and the well development program is ongoing. The Jalmat Unit water injection facilities have been commissioned, flowlines laid and water injection has now commenced in the northern area of the Unit. A 6-well drilling program on the Jalmat Unit is currently in progress, with two wells drilled to date. Permits have now been obtained to commence water injection on the Artesia Unit and a pilot waterflood in the southern area is scheduled to commence next month. Work is also scheduled to commence on the Turner Gregory Unit waterflood later this month

Commenting on this, Robert Adair, Chairman, said:

'We have continued to make good progress in all areas of operations. The result of the Yuri Shimanov exploration well in Bulgaria did not give us the commercial success we had hoped for, but it did establish an active petroleum system and an excellent new reservoir interval in the north of the Block 91-III Concession. This, combined with the initial 3-D seismic lines across the shelf, suggests that the area to the north and east of the Galata gas field remains very prospective.

In Egypt, we now have three operational drilling rigs which have been contracted through to the end of 2005. On the El Mansoura Concession, we continue to have considerable success. The Mit Dafir discovery, while small, is the first discovery in the eastern part of the concession and confirms the potential of that area. The reservoir quality is excellent and there are positive implications for the larger prospects in the central and eastern areas of the concession. A positive outcome of the testing of the laminated reservoir sections would also have great significance.

The two latest successful South Batra appraisal wells will add to production but, perhaps more significantly, these wells have also confirmed the real extent of the Pliocene Horizon. The new 3-D seismic is showing a number of Pliocene channel systems, analogous to Mansouriya, in the South Batra area and also across the South Mansoura area. Over 50 Pliocene prospects have now been identified using the 3-D seismic with potential reserves ranging individually from 20 Bcf to in excess of 200 Bcf. We therefore expect the Pliocene play to add significantly to production and reserves with 17 prospects planned to be drilled over the next year.'