Melrose eyes storage role for Galata

Offshore staff

EDINBURGH, UK --Melrose plans to withdraw from deepwater exploration offshore Bulgaria, following recent drilling results in the Black Sea.

Instead, the company will re-focus its activities in Bulgaria's shallow water areas. It hopes shortly to be awarded the Galata exploration block, which surrounds its producing Galata gas field.

It also has signed an agreement with state-owned utility Bulgargaz to conduct joint studies into the feasibility of converting Galata into an offshore gas storage facility.

Melrose has contracted the semisubmersibleAtwood Southern Cross to complete an appraisal well in Galata's eastern fault block. This region has not been directly drained by producers, and the new well will provide reservoir pressure and deliverability data for the storage feasibility studies.

The rig then may drill an exploratory well close to Galata, before demobilizing out of the Black Sea. Melrose estimates the costs of the remaining rig program, including demobilization, at $15 million.

11/16/2007