Melrose plans £53.4m exploration

Oil and gas firm Melrose Resources yesterday said it planned to spend £53.4 million on exploration and development work next year.

The Edinburgh-based firm said just under half of total spend – some £24m – would be spent on exploration wells in Bulgaria and Egypt and on a seismic survey in Romania.

The remainder of the investment will be allocated to the company’s main producing fields in Egypt.

Melrose said its capital budget had been set at a level which would allow it to continue reducing its debts and to cut gearing to below 100 per cent by the end of this year and to 50 per cent – 60 per cent by the end of 2012. Longer term it is aiming for gearing levels to be below 30 per cent.

The first Egyptian well scheduled to be drilled will be Al Hajarisah in the South East Mansoura concession, which is expected to begin drilling in the second quarter. The second well in southern Egypt is scheduled to begin drilling late in the third quarter. In Bulgaria, one well is set to be drilled in the central area of the Galata block.

Melrose chief executive David Thomas said: “We are looking forward to 2012 when we will continue to pursue our various exploration and development projects.

“The exploration programme contains some potentially high impact wells, both in Egypt and Bulgaria, and we will be particularly pleased to commence the seismic acquisition programme on the Muridava and Est Cobalcescu blocks, offshore Romania.” Shares in Melrose closed down 3.75p at 124p.