Melrose aims to drill Romanian prospect

Melrose Resources hopes the Romanian government shortly will approve its assigned interests in the Pelican and Midia concessions in the Black Sea.

Offshore staff

EDINBURGH, UK -- Melrose Resources hopes the Romanian government shortly will approve its assigned interests in the Pelican and Midia concessions in the Black Sea. Both are currently operated by Canadian company Sterling Resources.

Assuming approval within the next two months, Melrose is preparing to drill an exploration well this summer in the Pelican permit to test the Eugenia South oil prospect, formerly known as Gasca. The well will be drilled to the Cretaceous formation, targeting reservoirs known to be productive in the nearby Lebada fields.

In the Bulgarian offshore sector, Melrose has signed a letter of intent to sell 4.24 bcf of gas from the Kavarna field to a Bulgarian gas trading entity during the first year of the field’s development. Some of the gas will be purchased in advance, with a cash payment of $10.2 million due prior to first production.

The company anticipates an average gas sales price of over $6.50/MMcf for the first year of production from Kavarna, assuming that the Brent oil price remains at over $70/bbl in the near term.

02/24/2010

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