Melrose to quit US after Romanian rights win

The company yesterday announced it had won rights to explore in a 2,000 square kilometres area of the Black Sea off the coast of Romania.

Melrose will have an 80 per cent stake in a joint exploration venture with Petromar Resources and intends to invest 40 million over the first three years of the concession agreements.

The exploration blocks lie in an under-explored area of the Black Sea, which became re- accessible for exploration in February 2009 following the resolution of a maritime boundary dispute between Romania and the Ukraine.

Melrose also announced it will look to sell its interests in Texas and New Mexico to enable it to focus on its other prospects which include ones in Bulgaria, Turkey and Egypt.

The firm said further investment would be needed in its US developments but that its other interests provided more strategic investment opportunities.

Advisers are being appointed to assess the market potential of the assets and proceeds from the sale, which is expected to take six to nine months, and will mainly be used to reduce debts with the balance for capital investment.

David Thomas, Melrose Resource's chief executive, said: "We are delighted to have been the successful bidder for two high quality exploration blocks offshore of Romania and this represents an important milestone for the company as we seek to establish the country as a long-term core investment area.

"We are also pleased with progress on our exploration work programmes in Bulgaria and Turkey."

In May, Melrose said it had increased output by 17 per cent in the first quarter of the financial year to an average of 38,131 barrels of oil equivalent a day. It expects capital expenditure of around 100m this year.

Shares in the company closed up 2.25p at 291.25p, valuing it at 331.4m.