RNS Number:0812U
Melrose Resources PLC
12 January 2004


For Immediate Release                                            12 January 2004



                           MELROSE RESOURCES PLC


           Galata project update and Block 91-III exploration update


Melrose Resources plc ("Melrose") today announces that the two production wells
on the Galata Gas Field development in the Black Sea, offshore Bulgaria, have
been successfully drilled and completed. Both the GP No. 1 and GP No. 2 wells
tested at rates of approximately 30 MMcfpd and flowing wellhead pressures of
1,500 psi.


The GP No. 2 production well confirmed an extension to the gas reservoir in the
northern fault block of the Galata structure. This has resulted in a significant
increase in the proven reservoir volume and field reserves. Based on the
original production test and the new pressure data, proved reserves are now
estimated to be 65 Bcf, compared with 49 Bcf carried previously and proved plus
probable reserves are estimated to have increased from 80 Bcf to 90 Bcf. Melrose
owns a 100% working interest in the field.


A storm on 24 December 2003 caused damage to the barge which was laying the
offshore pipeline. The barge has returned to port in Varna for repair. It is
expected to resume operations before the end of January and to complete the
remaining 5.3 km of pipeline in early February. The additional costs, some of
which will be recovered from project insurance, are still being assessed. First
production on the development has now been delayed until the end of February
2004. The offshore platform (and its production facilities) and the onshore
pipeline are now effectively complete. Construction of the onshore gas process
plant is well advanced and is expected to be completed well ahead of the revised
first production date.


The processing of 470 km of infill seismic over the southern part of Block
91-III which was acquired in 2003 has now been completed. The initial
interpretation has identified seven structures in the same producing horizon as
the Galata Gas Field. The prospectivity of the deeper Oligocene channel play has
also been confirmed. Enhanced seismic processing will be carried out on these
structures prior to selecting a drilling location.


Commenting on this, Robert Adair, Chairman, said:


"The results of the two Galata wells and the resultant increase in reserves are
extremely good news as this significantly enhances our net asset value and
future revenues.


Further confirmation of the exploration prospects, both in the Galata trend and
in the Oligocene channel, is also very encouraging. We will be selecting a
location for an exploration well to be drilled in the third quarter of 2004 and
a further well is now being planned for 2005.


The Galata "look-alike" prospects each have potential reserves of the same order
of magnitude as Galata and, with the platform and infrastructure already in
place, the economics of further developments would be very attractive. However,
I am most excited by the structure identified in the Oligocene channel as the
potential reserves here could be in excess of 1 Tcf."

For further information please contact:

Melrose Resources plc
Robert Adair , Chairman                                          0184 553 7037
Munro Sutherland, Finance Director                               0131 221 3360
Chris Thomas, Corporate Development Director                     0207 462 1600

Buchanan Communications                                          0207 466 5000
Tim Thompson
Ben Willey


or visit the Company's new website at www.melroseresources.com







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