Melrose Production to Surge on New Bulgarian Fields

Melrose hopes to reap the benefits of its recent development programmes in 2010, with strong cash-flow funding its active exploration campaign. File photo

Edinburgh-based oil explorer Melrose Resources is on track to produce 40,000 barrels of oil a day next year as it brings two new Bulgarian gas projects on stream, the Scotsman reported.

The FTSE 250 company was Bulgaria's largest producer of domestic gas for several years until 2008, when its Galata field in the Black Sea was exhausted. Most of the country's supplies come from Russian giant Gazprom.

Next year, Melrose plans to spend USD 51 M bringing the Kavarna and Kaliakra fields into production in July and October. This move is expected to restore its Bulgarian production to 2007 levels.

The group said yesterday that it was still hopeful of signing off a gas storage agreement with the national government, a potentially lucrative deal that would pump gas into the now disused Galata field during periods of low demand.

New production from Bulgaria and increased production from Egypt means Melrose now expects to produce 40,000 barrels of oil equivalent a day in 2010 – 1,500 barrels a day more than its previous forecasts.

The group, majority-owned by executive chairman Robert Adair, will get more than 80 per cent of its production from Egypt, which will also be the focus of its exploration campaign.

Chief executive David Thomas said that Melrose "should start to reap the benefits" of its recent development programmes in 2010, with strong cash-flow funding its active exploration campaign.

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