Melrose Upbeat on Bulgarian Gas Fields Production

The group said it is continuing the development of the recent Kavarna and Kaliakra discoveries in the Bulgarian waters of the western Black Sea and expects production to follow in October. File photo

British oil and gas explorer Melrose Resources reported a 30% rise in half yearly pre-tax profit, helped by higher oil prices, and said it expects to reveal increased production from its Bulgarian gas fields.

For the six months ended 30 June pre-tax profit rose to USD 26.2 M compared to USD 19.8 M the same time a year before. Revenue increased 13% to USD 110 M while working interest production climbed 13% to 40.1 mboepd.

"The first half of 2010 proved to be an extremely positive period of development and I believe the outlook is equally strong," chairman Robert Adair commented.

The group, which has operations in Turkey, Romania and Egypt, said it is continuing the development of the recent Kavarna and Kaliakra discoveries in the Bulgarian waters of the western Black Sea and expects production to follow in October.

Bulgaria’s government granted two weeks ago a ten-year concession for the extraction of natural gas to the UK company Melrose Resources.

The concession refers to the Kavarna deposit.

The news about the concession came a week after the government and Melrose announced the discovery of new natural gas deposits in the Black Sea off the northern Bulgarian coast, whose extraction is expected to bring down the natural gas prices in the country.

The Kavarna deposit is located in the Black Sea shelf near the town of Kavarna, and has an area of 4.36 square km. It is estimated to have about 773 million cubic meters of gas, and its extraction can start in 3-4 months.

The new deposit is located close to the Galata platform and the adjacent gas processing facilities in the region of Varna built by Melrose Resources.

The Kavarna deposit itself is not big but together with two other deposits nearby – Kaliakra and Kavarna East – it has a total of 3 billion cubic meters of natural gas.

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