Melrose Resources Opens New Fields in Bulgaria in Sept

Business » ENERGY | August 18, 2010, Wednesday // 14:26
Bulgaria: Melrose Resources Opens New Fields in Bulgaria in Sept The group said it is continuing the development of the recent Kavarna and Kaliakra discoveries in the Bulgarian waters of the western Black Sea. File photo

British oil and gas explorer Melrose Resources announced it expects to receive a boost when the first of two Bulgarian fields begins production in September.

Dave Thomas, chief executive, said the Bulgarian fields were crucial to increasing the company’s cash flow.

“Cash from operations will grow steeply. As soon as these Bulgarian developments come on, we’re on a strong growth curve – assuming a USD 70 barrel of oil, [we’re expecting] USD 240 M in cash flow from our operations in 2013,” said Thomas, as cited by the Financial Times.

British oil and gas explorer Melrose Resources reported a 30% rise in half yearly pre-tax profit, helped by higher oil prices.

For the six months ended 30 June pre-tax profit rose to USD 26.2 M compared to USD 19.8 M the same time a year before. Revenue increased 13% to USD 110 M while working interest production climbed 13% to 40.1 mboepd.

The opening of new fields in Bulgaria is expected to boost production by 7,500 barrels of oil equivalent per day.

“Production was slightly better than expected and the second half will be driven by Bulgaria. As for the net debt, Melrose sells fixed-price gas and if the oil price stays buoyant I don’t see it as an issue,” said Nick Copeman, an oil analyst at Oriel Securities.

Bulgaria’s government granted two weeks ago a ten-year concession for the extraction of natural gas to the UK company Melrose Resources.

The concession refers to the Kavarna deposit.

The news about the concession came a week after the government and Melrose announced the discovery of new natural gas deposits in the Black Sea off the northern Bulgarian coast, whose extraction is expected to bring down the natural gas prices in the country.

The Kavarna deposit is located in the Black Sea shelf near the town of Kavarna, and has an area of 4.36 square km. It is estimated to have about 773 million cubic meters of gas, and its extraction can start in 3-4 months.

The new deposit is located close to the Galata platform and the adjacent gas processing facilities in the region of Varna built by Melrose Resources.

The Kavarna deposit itself is not big but together with two other deposits nearby – Kaliakra and Kavarna East – it has a total of 3 billion cubic meters of natural gas.

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Tags: Melrose Resources, Kavarna, Kaliakra, Galata
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