Melrose Resources plc, the oil and gas exploration, development and production company provides an update on its operational activities in Egypt. Development activity on Melrose’s fields in the Nile Delta has continued and the Company is pleased to announce that the South Khilala field, which contains estimated reserves of 36 Bcf, was successfully brought on stream on 16 October 2009. The field was discovered in the Mansoura concession in April 2009 and has been tied back to the West Khilala production facilities using a 10 kilometre, 6 inch flow line. The combined South and West Khilala production rate is currently 114 MMcfpd.

The Company is also pleased to announce that it has completed the commissioning activity on the West Dikirnis LPG Fractionation Towers and Vapour Recovery Plant. The construction activity on the Gas Reinjection facilities is now expected to be completed in early January due to delays related to the delivery of equipment from the Far East. This will result in the production of additional sales gas volumes from the field equating to approximately 30 MMcfpd during the last quarter of this year.

The EDC9 drill rig is currently completing the fourth West Dikirnis horizontal development well and will then commence a four well drilling program in the Nile Delta, comprising three exploration wells and one further West Dikirnis horizontal well.

The first exploration well will be drilled to test the North West Nabourah prospect, which is located on the same Qawasim geologic trend as the South and West Khilala fields, and contains mean unrisked reserves of 60 Bcfe with a Chance of Success (“COS”) of 43 percent. The second well will test the Tall Rak structure, a Sidi Salim prospect on the same geologic trend as the Tamad oil field in the South East Mansoura concession. This prospect has unrisked gas reserves of 190 Bcf with a COS of 33 percent and similar to Tamad has oil potential. The third well will drill the South Damas Sidi Salim prospect which has unrisked reserves potential of 32 Bcfe and a COS of 65 percent.

Following the completion of the Nile Delta drilling sequence, the EDC9 rig will be mobilised to Upper Egypt to spud the first exploration well on the Mesaha exploration concession in late 2010. In preparation for the well, in early 2010 the Company plans to acquire a 2,000 kilometre 2-D seismic survey over the western area of the concession, where a recent gravity survey has confirmed the presence of a major untested sedimentary basin. Melrose operates and holds a 40 percent working interest in the Mesaha block.

Commenting on the update, David Thomas, Chief Executive said:
“The receipt of the Certificate of Commerciality for the Kavarna field from the new Bulgarian Government administration is an important milestone. We now look forward to accelerating the development of our various projects in Bulgaria and Romania which will contribute significantly to the regional domestic gas supply. We are also looking forward to an active near term exploration programme in Egypt with some important wells to drill in the Nile Delta and 2-D seismic to acquire in the Mesaha block.”

(Oil Egypt)