Melrose to sell assets as profits rise by 32%

HIGHER oil prices helped profits at oil and gas explorer Melrose Resources rise by 32 per cent in the first half of the year.

The Edinburgh-based company also revealed it has identified a number of parties interested in acquiring its assets in the Permian Basin in the US, with a sale expected by the first quarter of 2011.

In the six months ended 30 June, pre-tax profit rose to $26.2 million (16.76m), compared to $19.8m in the same period last year. Revenues increased 13 per cent to $110m.

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 western Black Sea off Bulgaria and expects production to start in October. The company hopes they will contribute about 7,000 barrels of oil equivalent per day (boepd) to overall production.

Melrose added that it was still waiting for final approval from the Romanian government to complete its acquisition of a 32.5 per cent stake in the Midia and Pelican concessions offshore from Romania.

The group is confident of maintaining its 2010 production guidance at 40 million barrels and expects that to rise by about 5 per cent next year.

Chairman Robert Adair said: "The first half of 2010 proved to be an extremely positive period of development and I believe the outlook is equally strong." Shares in the company closed up 3p at 302p.