Melrose Resources Makes New Gas Discovery in Egypt

Melrose Resources reports that the South Mansoura No.1 exploration well on the El Mansoura Concession in the onshore Nile Delta area of northern Egypt has reached an intermediate depth of 7920 ft. Wire-line logs indicate a gross mid-Pliocene reservoir interval of over 200 ft with 31 ft of excellent quality reservoir. The remaining section, comprising interbedded sands and shales, is also expected to contribute to reserves and production. Initial estimates indicate minimum reserves 25 Bcfe gross (Melrose has a 50% interest in this concession). This is potentially larger than the South Bilqas discovery which commenced production in December 2002 at 12 MMcfpd.

The well is currently being deepened to test the late Miocene Abu Madi formation at 8,300-9,000 ft. This is the formation which was successfully tested in February 2003 in the South Batra No.1 discovery well at rates of up to 31.2 MMcfpd and 560 bcpd. The South Mansoura No.1 well is expected to reach TD in the mid-Miocene Sidi Salim at 9,800 ft. Production casing will be run and the well will be tested following evaluation of the deeper zones.

Further evaluation work on the South Batra No.1 area indicates that the Abu Madi Level II channel sands can be mapped over an area of 40 sq km and the Level III channel sands can be mapped over 21 sq km. Should the structures be gas filled over these areas and down to the anticipated GWC, over 600 Bcfe of Gas Initially in Place might be expected in the two levels combined. EGAS has been approached to discuss a Development Area and plans are being made to shoot 3-D seismic over the area of the discovery.

Commenting on this, Robert Adair, Chairman, said: 'The South Mansoura No. 1 discovery confirms our understanding of the mid-Pliocene exploration play in this area. There are a number of similar seismic anomalies which should provide a solid, low-risk means of building production. In deepening this well, we are also now seeking to confirm the extension of the Abu Madi channel sand play into the south of the El Mansoura Concession.'