Melrose Production Rises 23% as Egypt, Bulgaria Output Gains
Melrose Resources Plc, a U.K. oil and gas company with assets in Europe and the Middle East, said production rose 23 percent in the first half to 20,200 barrels a day on increased output in Egypt and Bulgaria.
Profit after tax rose to $33.2 million from $4.1 million a year earlier, the company said in a statement in London. The company also reduced debt and revenue increased 42 percent.
Melrose has declined 21 percent this year in London trading on concern that political turmoil in Egypt will affect output and as investors shun energy explorers. Chief Executive Officer David Thomas said the company hadn’t been affected by unrest that led to the ouster of President Hosni Mubarak in February. About half the company’s cash from operations comes from Egypt and half from Bulgaria, he said.
“We’re starting to see the benefits from our investment in Egypt and Bulgaria,” Thomas said in a telephone interview. “We’ve had no operational disruptions in Egypt. While we’ve reduced our production guidance, that relates to a short-term operational challenge in Egypt, so production will be deferred into the following three years.”
Melrose said in May that production in 2011 will be about 40.5 million barrels of oil equivalent, down from a previous estimate of 44 million barrels. Output will decline for the next two years before rising again in 2014, even if the company doesn’t find any new oil and gas through exploration, Thomas said.
The company has acquired new exploration blocks in Egypt, Turkey and France. It plans to drill about three wells a year, which can be financed from operations and cash flow, he said.
The FTSE All-Share oil and gas producers’ index has declined 8 percent this year.
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