Melrose Resources Discovers Gas Offshore Bulgaria

Melrose Resources, the oil and gas exploration, development and production company,  announced an exploration discovery in the Galata block offshore Bulgaria.

The Kavarna East No.1 well has been successfully drilled to test an exploration prospect approximately 10 kilometres to the east of the Melrose operated Galata field production platform. The new gas discovery lies in between two other recent discoveries, Kavarna and Kaliakra, which contain combined reserves of 74 Bcf and are currently being developed using sub-sea production wells tied back to the Galata platform.

The Kavarna East No.1 well penetrated the top of the Paleocene reservoir interval at a depth of 2753 feet and encountered a net gas pay of 89 feet with an average porosity of 29 percent. The preliminary reserves estimate for the discovery is 12 Bcf, in line with pre-drill estimates, and it is expected to be developed using a low cost tie-back to the Kavarna sub-sea well location.

The well encountered a gross gas column of approximately 130 feet and consistent with the other fields which have been discovered on the same geologic trend, the reservoir structure is thought to be filled with gas to the spill point. This provides further evidence that the regional biogenic gas source is substantial and that gas volumes may have migrated further north into the central area of the Galata block. The Company plans to acquire seismic over this area of the concession in 2011 to evaluate its prospectivity.

The Jupiter rig will now be used to install the sub-sea tree for the Kaliakra field development and may then be used to drill the Kaliakra East prospect. This well remains contingent, however, on confirmation that the seabed conditions at the well site will allow the jack-up rig to operate at the required water depth.

Commenting on the update, David Thomas, Melrose’s Chief Executive said:

“Kavarna East represents the third consecutive discovery for the Company in Bulgaria and further supports our local exploration strategy to focus on areas close to the Galata platform where we can leverage the existing infrastructure. We will be moving forward to develop the discovery following the Kavarna and Kaliakra field developments which will come on stream over the next few months.”

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Source: Melroseresources, August 1, 2010: