LONDON -- Melrose Resources has signed a fully termed farm-in agreement with Sterling Resources under which it will farm-in to the Pelican XIII and Midia XV blocks in the Black Sea, offshore Romania.
Midia XV contains the undeveloped Ana and Doina gas fields, which the company estimates to contain gross combined probable reserves of 288 bcf. The blocks are expected to be sanctioned for development in early 2010. Melrose also believes that the blocks contain a significant number of exploration prospects and leads which are candidates for drilling in the short to medium term.
Under the terms of the farm-in, Melrose will earn a 32.5% interest in the blocks in return for providing $12 million in funding to Sterling. Melrose will also carry Sterling for a proportion of future development costs ranging between $63 million and $78 million, depending on the gas price achieved for the development projects.
Melrose will assume operatorship of the development projects until the end of 2011.
The transaction completion is subject to the appropriate government, partner, regulatory, and financial approvals.