Operations Update

RNS Number:4407F
Melrose Resources PLC
10 October 2007


For immediate release                                            10 October 2007



                             MELROSE RESOURCES PLC

                          ("Melrose" or "the Company")



                               Operations update



Melrose Resources plc (LSE:MRS), the oil and gas exploration, development and
production company, today provides an update on the results of its Egyptian
exploration program, new concession awards, a potential Bulgarian gas storage
project and the Company's oil and gas reserves.



Egypt Exploration



Following completion of the development drilling activity on the West Khilala
and West Dikirnis fields, Melrose has recommenced its exploration drilling
program in the Nile Delta. The near term program contains 9 wells and a further
22 leads and prospects have been identified for drilling in 2008 and 2009. The
risk-adjusted reserves being targeted by this program are 440 Bcf and 77 Mbbls
(note: all reserves quoted herein are on a working interest basis unless
otherwise stated).



The first two exploration wells in the program have now been drilled on a
structural trend, north of the West Dikirnis field, and have resulted in two
successful gas discoveries with high condensate yields.



The South Zarqa No.1 well penetrated 56 feet of net pay in the Qawasim sandstone
formation and has been flow tested at rate of 17.1 MMcfpd of gas and 660 bpd of
condensate on a 36/64" choke. The post-drill reserves estimate for the discovery
is approximately 50 Bcfe, however, an appraisal well will be required on the
structure to further refine the volumetric estimate.



The North East Abu Zahra No.1 well encountered 73 feet of net pay, also in the
Qawasim formation, and has been flow tested at a rate of 20.0 MMcfpd of gas and
640 bpd of condensate on a 36/64" choke. The post-drill reserves estimate for
this discovery is approximately 20 Bcfe and follow-on exploration potential
exists in two other prospects located in the immediate vicinity.



The EDC-9 drilling rig is now moving from the North East Abu Zahra No.1 location
to drill an Abu Madi prospect, East Abu Kahdra, with unrisked reserves potential
of 50 Bcf. After completing South Zarqa No.1, the EDC-53 drilling rig will move
to drill a Qawasim prospect, Buhut, which has unrisked reserves of 30 Bcf and
which, if successful, will open a new Qawasim play system in the west of the
Mansoura concession. Site preparation activities are also underway to expedite
the drilling of two other Qawasim prospects in the east of the concession, South
Tarif and West Zahira. These are material and have combined unrisked reserves
approaching 250 Bcf, plus hydrocarbon liquids potential.



The Company has recently received new and reprocessed 3-D seismic data covering
a large part of the Mansoura concession and it is anticipated that this will
lead to a further expansion in Melrose's prospect inventory.



The development of the West Dikirnis field is proceeding well and the Company
expects to announce first production in late October/early November following
final hook-up activities.



New Concession Awards - Egypt and Turkey



On 9 October 2007, the Egyptian Mesaha concession was officially assigned to
Melrose and its joint venture partners, Hellenic and Oil Search, at a ceremony
attended by his Excellency the Minister of Petroleum, Eng. Sameh Fahmy. The
concession, which covers an unexplored sedimentary basin, is bounded by the
Sudanese border in Upper Egypt and has an area of 57,000 km(2). The initial
exploration period is 4 years and the licence can be extended to cover a maximum
of 9 years. The gross financial commitment is $14.3 million and Melrose holds a
40% operated working interest in the block.



On 3 September 2007, Melrose and its joint-venture partner, GYP, were awarded
eight exploration concessions in the South Mardin basin in south-east Turkey on
the border with Syria. These concessions cover a combined area of 3,910 km(2)
and the initial exploration period is 4 years, with two optional 2 year
extensions. The gross financial commitment is $5 million and Melrose holds a 75%
operated working interest in the concessions.



These new frontier exploration initiatives have limited capital commitments and
are consistent with Melrose's strategy of maintaining a balanced portfolio which
includes geologically diversified, high potential exploration assets.



Bulgaria Gas Storage



The requirement for gas storage facilities in Europe is continuing to increase
due to gas supply uncertainties and legislative changes. In recognition of this,
Melrose and Bulgargaz Holdings, the Bulgarian state-owned gas utility company,
are finalising an agreement under which the two parties will conduct a joint
feasibility study to evaluate the conversion of the Galata field to a gas
storage facility.



Company Reserves



In its 2007 Interim Report, Melrose incorporated a downward revision to the
proved plus probable net entitlement reserves on the material West Khilala, West
Dikirnis and South Batra fields in Egypt of 37.6 Bcfe (equivalent to 10.2% of
the Company's net reserves).  The Company has now completed a comprehensive
review of the reserves on all its remaining assets and does not expect to make
any further downward net reserves revisions on its US or Egyptian assets.
However, based on pressure data obtained during a one-month field shut-down in
July the Galata gas field reserves are likely to be reduced by 11 Bcf.



Commenting on the above, David Thomas, Chief Executive, said:



"The results from the first two exploration wells in our new Egyptian drilling
campaign are highly encouraging and we are particularly pleased by the high
condensate yields. The well results demonstrate the value of using sophisticated
3-D seismic data analysis techniques to identify prospects in the onshore Nile
Delta setting. Using this technology, we are confident that we can achieve world
class exploration success rates going forward and will continue to focus our
exploration efforts on this region on the near to medium term.



We are also encouraged by the ongoing dialogue with the Bulgarian authorities
regarding the potential use of the Galata field for gas storage and look forward
to delivering additional shareholder value from this project."



For further information please visit www.melroseresources.com or contact:


Melrose Resources plc

David Thomas, Chief Executive                                       0131 221 3360
Robert Adair, Executive Chairman
Munro Sutherland, Finance Director


Buchanan Communications
Tim Thompson                                                        0207 466 5000
Ben Willey



Glossary:

Bcf - billion cubic feet of gas
Mbbls - million barrels of oil or condensate
Bcfe - billion cubic feet of gas equivalent
bpd - barrels per day of oil or condensate
MMcfpd - million cubic feet per day

                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

MSCILFITITLAIID