Melrose Resources Logs Pay in Egypt

Melrose Resources reports that the South Batra exploration well on the El Mansoura Concession in the onshore Nile Delta area of northern Egypt has reached a TD of 10,300 feet. Wire-line logs identified 151 feet gross (74 feet net) of good quality reservoir in Level III of the late Miocene, Abu Madi formation, and confirmed the presence of gas and condensate.

Initial estimates indicate a potential most likely reserves figure of 150 Bcfe gross (Melrose has a 50% interest in this concession). Approximately ten feet (gross) of gas bearing reservoir was also logged in Level II of the Abu Madi, but this interval will not be tested in this well as the reservoir section is believed to be much thicker at another location on the structure. As a result, casing has been run and the well has been completed. The well has been flowed at three test rates from 17.8 to 31.2 MMcfpd and up to 506 bcpd (separator restricted). Well data is being re-integrated into the prospect evaluation in order to establish a more precise reserve volume and also to evaluate further a number of offsetting prospects within the Abu Madi channel system.

The rig will now move to the location of the South Mansoura No.1 well. This prospect is similar to the Pliocene El Mansoura No.3 discovery well, which was completed and tested in January 2002 and brought on production at a rate 12 MMcfpd (gross) as the South Bilqas Field in December 2002.

Robert Adair, Melrose Chairman Rober Adair, said 'In Egypt, confirmation of the extension of the Abu Madi channel sand play into the El Mansoura Concession, from the East Delta Concession to the North, is very positive news. This result demonstrates the potential of a number of offsetting Abu Madi channel structures and establishes a second exploration play on the concession. Initial estimates of recoverable reserves are significantly in excess of our expectations. The planned South Mansoura No.1 well will target the original play in the Pliocene formation which was set up by the El Mansoura No.3 discovery.