Melrose reports production up 18%
Melrose Resources, the Edinburghbased oil and naturalgas explorer with interests in the US, Bulgaria, France and Egypt, said yesterday that total production for 2007 rose by 18% to 32.8 billion cubic feet of gas equivalent (bcfe).
The company said total production in 2007 was slightly lower than forecast primarily due to a delay in achieving first production at the West Dikirnis field in Egypt that came on stream on November 30.
Melrose said production was increased gradually in order to acquire well test and reservoir data to help maximise ultimate oil and gas recoveries.
Gross production has reached 8000 barrels of oil or condensate per day and is now expected to exceed the target level of 10,000 bopd by the end of February.
The gross production at the West Khilala gas field has also been increased gradually over the last few months and is currently 102 million cubic feet per day. Melrose said its previous guidance for total net production in 2008 of 120 million cubic feet of gas equivalent per day remains unchanged.
Commenting on the figures, David Thomas, the firm’s chief executive, said: "Melrose has delivered strong operational performance in 2007, achieving first production from both the West Khilala and West Dikirnis field developments.
"As a result we saw a significant production increase on 2007 and anticipate a further material increase in 2008. West Dikirnis, in particular, will contribute significant oil volumes increasing our exposure to high world oil prices."
A company spokesman said Melrose is now producing more oil than gas and has been able to take advantage of soaring prices for crude.
Analysts at securities house Brewin Dolphin were bullish on the firm’s prospects. They said: "Melrose has announced details of its production, pricing and reserves numbers for 2007, which are broadly in line with our forecasts.
"There is also an upbeat statement relating to the outlook for a material increase in production in 2008. We retain our pretax profit forecast of $80m for the current year."
The analysts also said they had a "buy" recommendation on Melrose stock. Shares in Melrose rose 4.75p, or 1.36%, to close at 354p.
Original source : The Herald
