Melrose Resources PLC Romanian Offshore Est Cobalcescu Farm-out (7638L)

TIDMMRS

RNS Number : 7638L

Melrose Resources PLC

10 September 2012

FOR IMMEDIATE RELEASE

10 September 2012

MELROSE RESOURCES PLC

Romanian Offshore Est Cobalcescu Concession Farm-out

Melrose Resources plc ("Melrose" or the "Company"), the oil and gas exploration, development and production company, today announces that it has agreed to farm-out 30 percent of its equity in the Est Cobalcescu exploration concession (the "Concession") to Beach Petroleum (CEE) S.R.L ("Beach"), a wholly owned subsidiary of Beach Energy Limited.

Following completion of the transaction Melrose will retain operatorship and a 40 percent working interest in the Concession, with Beach and Petromar Resources S.A. ("Petromar") each holding a 30 percent working interest.

Under the terms of the transaction, Beach will pay its proportionate share of past costs on the licence and carry Melrose's share of the recently completed 3D seismic survey, representing an amount of approximately $4.8 million. The net effect of the cost carry and new equity arrangements will be to reduce Melrose's 2012 capital budget by around $8.4 million and the Company's drilling costs over the following two years by an estimated $16 million.

The transaction is subject to the formal approval of the Romanian National Agency of Mineral Resources.

Commenting on today's announcement, David Thomas, Chief Executive, said:

"We are pleased to announce the farm-out which is consistent with our strategy to align the Company's working interests in Est Cobalcescu and the neighbouring Muridava concession at 40 percent. Both licences offer material exploration potential in an under-explored region of the Black Sea, however, it is prudent at this stage to share some of the investment risks on the multi-well drilling program planned on the blocks over the next two years. We welcome Beach to the joint venture partnership and look forward to expanding the business relationship between our companies over future years."

For further information please contact:

 
 Melrose Resources plc 
  David Thomas, Chief Executive 
  Diane Fraser, Finance Director     0131 221 3360 
 
 
 Pelham Bell Pottinger 
  Mark Antelme 
  Henry Lerwill            0207 861 3232 
 

or visit www.melroseresources.com

.

This information is provided by RNS

The company news service from the London Stock Exchange

END

MSCUGUAPBUPPUBM