US Operations Update

RNS Number:9761O
Melrose Resources PLC
22 August 2003


FOR IMMEDIATE RELEASE                                 22 August 2003



                             Melrose Resources plc

                              US operations update


Melrose Resources plc, the oil and gas exploration and production company with
interests in Bulgaria, Egypt and USA, today announces that, following its recent
successful Placing and Open Offer, it is accelerating development of its
reserves in the USA which are held through its subsidiary, Melrose Energy
Company ("MEC").


MEC has committed to a 5 well development drilling programme on the Jalmat Unit
in Lea County, New Mexico, commencing in September 2003.  It is expected that
all 5 wells will be drilled before the end of this year, adding in excess of 200
boepd of production to current production of 800 boepd.  In addition, MEC also
plans to initiate a secondary recovery (waterflood) programme on the Jalmat Unit
later this year.


Earlier this month, MEC completed the sale of mineral rights covering
approximately 3,800 acres in Parker County, Texas, for cash consideration of
$570,000 (#360,000) plus a retained royalty interest and an option to
participate in any wells drilled on this acreage.  The sale was of leases with
some exploration potential that MEC did not wish to explore: the sale did not
include any producing wells and no oil and gas reserves had been attributed to
the interests disposed of.


Melrose's capital expenditure in the USA in 2004 is expected to increase to $6
million with a further 5 new wells planned on the Jalmat Unit and 8 new wells on
the Artesia Unit in Eddy County, New Mexico.  Waterflooding of the Artesia Unit,
initially on a pilot basis, is also planned for 2004. This capital expenditure
will be funded with up to $1.5m from Melrose Resources plc and the balance from
cashflow and debt facilities in the USA.  Further development activity is
planned for 2005 and 2006.


Commenting on this, Robert Adair, Chairman, said:


"Our properties in the USA have significant upside development potential.  The
proceeds of this sale of a non-core asset and some of the proceeds of the
Placing and Open Offer will be applied to our development programme in the USA
where we have set a production target of 3,000 boepd by the end of 2006.
Commitment to the waterflood projects on the Jalmat Unit and the Artesia Unit is
a significant step towards achieving this target.  In addition, we hope to
achieve an increase in total reserves as we believe that our reserves,
especially those relating to secondary recovery, are cautiously stated compared
with analogous projects in the area."


For further information please contact


Melrose Resources plc
Robert Adair, Chairman                                         0131 225 6678
David Curry, Chief Executive                                   0131 225 6678
Chris Thomas, Corporate Development Director                   0207 462 1600

Buchanan Communications Limited
Tim Thompson/Sophie Morton                                     0207 466 5000




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