Melrose pushing ahead with expansion as gas prices rise

The firm expects to award a contract next month to carry out seismic survey work in Romania over the summer after receiving 12 tenders for the work.

Melrose is also sifting through survey data from the Rhone Maritime exploration block off the southern coast of France and expects to meet its partner, Noble Energy, within weeks to formulate a plan for the site.

News of the next stages in Melrose’s development came as the driller released its production figures for 2011 from gas fields in Bulgaria and Egypt.

Although output was unaffected by Egypt’s political turmoil, the firm’s production figures from the country did fall below its previous guidance due to delays at one of its development wells late on in the year.

But the declines in Egypt were offset by rising production off the Black Sea coast of Bulgaria.

Chief executive David Thomas said: “The production volumes from Bulgaria and Egypt last year, coupled with the strong commodity prices, have positioned the company well to deliver good financial results.

“This coming year, with the benefit of increased gas prices in Bulgaria, we expect to see similar progress and look forward to achieving our new target of reducing financial gearing to below 60 per cent by year end.”

Melrose, in which executive chairman Robert Adair holds a 51 per cent stake, will publish its full-year results on 28 March.

Shares closed down 3 per cent or 4.25p to 136p.

PETER RANSCOMBE