Melrose Resources to Fast Track Development of Tamad Field

The El Tamad No.2 on the El Mansoura Concession in Egypt was drilled as a directional appraisal well to test the down-dip section of the El Tamad structure and to establish the oil water contact in the area. The well reached TD at 7,048 ft in the Miocene Sidi Salim formation. Five intervals were successfully cored and two main reservoir sections were identified and correlated with the Tamad No.1 well. Gas was identified in the top carbonate section in conformity with the Tamad No.1 gas oil contact. An oil column of 24 ft was found above a marked oil water contact at 6,624 ft. A 7 ft interval at the top of the oil rim was tested and flowed at 1,041 bpd of 45.6 API oil and 780 Mcfpd on a 20/64 inch choke with a well head flowing pressure of 1,120 psi.

Melrose has now committed to the fast track development of the Tamad field. An oil flowline is being built to link up with the existing oil pipeline to Cairo and a gas line is being built to the South Mansoura gas gathering facility. It is expected that the field will be put on production by year-end at a forecast initial rate of around 1,000 bopd. The facilities will be sized to allow for the processing of oil production from further discoveries in the area.

The Kafr el Zahyrah No.1 was an exploration well targeting a shallow amplitude anomaly in the Pliocene El Wastani formation. The well reached TD at 3,300 ft in the Kafr El Sheikh formation but there were no gas shows and the well was plugged and abandoned.

The South Mansoura No.7, a directional exploration well, targeted amplitude anomalies in the Kafr El Sheikh formation, down-dip of the South Mansoura No.1 gas field. The well reached TD at 5,097 ft and a 66 ft gas-bearing reservoir interval was encountered from 4,454 to 4520 ft. A 22 ft interval was perforated and flowed at 5.6 MMcfpd on a 22/64 inch choke at a well head flowing pressure of 1,440 psi. Pressure analysis showed the accumulation was depleted, confirming that the well has tapped reserves in communication with South Mansoura No.1. The South Mansoura No.1 well continues to produce at 9.3 MMcfpd. The No.2 well has confirmed the extent of the South Mansoura field although there is no material increase in reserves.

The ECDC-1 rig has now moved to the Abu Arida location, a shallow Kafr el Sheikh anomaly located at the north end of the existing Mansouriya Channel play. Thereafter, the rig will move back to the El Tamad area to drill four shallow Sidi Salim exploration wells on the Tamad oil trend. The PD-104 rig has now moved to the West Khilala exploration prospect located in the northwest of the concession area. The well will test a strong seismic anomaly at the Miocene Abu Madi level. Thereafter, the rig will move to the West Dikirnis location to test a deeper Sidi Salim exploration prospect with oil potential to the northeast of El Tamad.

Commenting on this, Robert Adair, Chairman, said:

'Establishing commercial oil production from the El Tamad field will represent another important milestone for Melrose. As important is the immediate commitment to drill four more structures with oil potential in the El Tamad area which are potentially much larger than El Tamad. While the risk associated with drilling these structures is higher than drilling seismic anomalies with gas indicators, the probability of finding further oil reserves makes this drilling program very attractive. The deeper Sidi Salim test at West Dikirnis is even higher risk but higher potential in terms of reserves. The outcome of the drilling program over the next quarter could be very significant for Melrose.'