Melrose Announces West Khilala 5 to be Tied Back for Production

07-12-2007

As previously announced, Melrose Resources' West Khilala No.5 development well was successfully drilled at the northern-most extent of the West Khilala Field. The well was tested over two intervals, totaling 38ft, and flowed at 9.6 MMcfpd on a 20/64" choke. The well has now been suspended and will shortly be tied back for production.

The rig has now moved to drill the West Khilala No.7 (Deep) exploration/appraisal well which is located on the south-east flank of the field. The main objective for this well is to test an exploration prospect in the deeper Qawasim formation, but it will also serve to delineate the edge of the main productive Abu Madi reservoir.

The West Dikirnis No.6 well was drilled to test a separate culmination to the south of the main West Dikirnis field. The well intersected the top reservoir sand at 9,276 ft, which was found to be water wet. The rig has moved to drill the West Dikirnis No.8 deviated development well as an oil producer in the central-eastern area of the field.

Commenting on this, David Thomas, Chief Executive, said:

"The test results from the West Khilala No.5 well, drilled at the northern limit of the field, are very positive since they confirm that we have good and consistent reservoir quality across the field. The West Dikirnis No.6 well was drilled to delineate the southern most limits of the field and so the results, whilst disappointing, were not particularly surprising. The West Dikirnis field development is now 75% complete and remains on track for first production at the end of the third quarter."