Melrose: Egyptian Well to Go Onstream in Q3

Melrose Resources plc said that its West Dikirnis No.7 appraisal well in Egypt was drilled as a step-out well on the northern flank of the West Dikirnis field.

As previously reported, this well intersected a net oil column of around 40ft which was above expectations and which should confirm an increase in proven reserves for the field. The well has now been successfully tested. Four flow periods of increasing choke sizes were carried out and a maximum oil rate of 2,002 bopd was achieved on a 28/64th choke at a wellhead pressure of 1,995 psi. The well will be temporarily shut-in as a planned producer with first production being targeted for the third quarter of this year. The rig has been released to move on to the West Dikirnis No.3 development well.

On the Rhone Maritime permit offshore France, oil seep analysis is now planned with the objective of reducing the exploration risk with a view to seeking a farm-out partner later in the year. Seabed coring may also be considered.

In the US, a review of the geology and geophysics of the East Texas properties acquired in the Merlon acquisition has yielded some encouraging results. Several leads and prospects have been identified and two prospects of 25 Bcf and 42 Bcf have been selected and are likely to be drilled in 2007. An appraisal well close to existing production may also be drilled.

Robert Adair, Melrose's Executive Chairman, said:

"The result of West Dikirnis No.7 is encouraging as it proves the presence of a good oil reservoir and confirms the extension of the field to the north towards another exploration target at South Zarqa. In the US, the Lake Houston project is looking interesting and we intend to drill two or three exploration or appraisal wells there."

Melrose Resources plc is an exploration and production company with interests in Egypt, Bulgaria, France and the US.