Melrose Successfully Tests South Mansoura No. 1

Melrose Resources reports the successful testing of the South Mansoura No.1 exploration well which is located in the onshore Nile Delta area of Egypt. The well has also confirmed the extension of the prolific Abu Madi channel sand system further south into the El Mansoura Concession in which Melrose holds a 50% working interest through its wholly-owned subsidiary, Odyssey International Petroleum.

A total of 46 ft was perforated in the mid-Pliocene Kafr el Sheikh formation between 4,206 ft and 4,273 ft. The well flowed at 17.7 MMcfpd on a 3/4 inch choke at a flowing pressure of 1,255 psi at surface. Most likely reserves are estimated at 45 Bcf. The flow rate is similar to the South Bilqas discovery well which was drilled and tested in January 2002 and was brought on production in December 2002 at a rate of 12 MMcfpd but the gross reservoir interval encountered was much thicker and potentially more productive than that in South Bilqas.

The South Mansoura No.1 well was drilled and logged to this Pliocene interval in early March and then was deepened to test the late-Miocene Abu Madi formation with a final TD of 9,715 ft. The top of the Abu Madi formation was encountered at 7,995 ft and very high background gas readings were observed drilling the interval 8,190 to 8,350 ft. It is believed that this corresponds to the Level III channel interval encountered in the South Batra No.1. While the zone is below the water contact at this location, there are indications from sidewall core and pressure data that there may be gas and condensate up-dip on what appears to be a large structure. A location for an appraisal well, to further evaluate both the Kafr el Sheikh and the Abu Madi intervals, is being defined.

The rig is currently moving to the Mansouriya No.1 location approximately 10 km to the west of the South Batra No.1. The main exploration target is the Kafr el Sheikh at 6,500 ft but the well will be deepened to the Abu Madi with the TD expected at around 10,000 ft.

Commenting on this, Robert Adair, Chairman, said: "The Pliocene interval test flow rate was in line with expectations and this well will contribute additional production and cash flow for Melrose. More significantly, we are very pleased to have established the presence of the Abu Madi channel system 18 km to the south of the South Batra No. 1 discovery and we are very excited about the significant potential of this area of the El Mansoura Concession."