Bulgaria boosts gas producer

OIL and gas explorer Melrose Resources has forecast a 24 per cent higher average daily production rate, helped by its Bulgarian developments.

The UK-based firm said it sees average daily production at 21.7 million barrels of oil equivalent per day (mboepd) on a net entitlement basis in 2011.

On a working interest basis, the company expects 2011 production at 44 mboepd, about eight per cent higher than the current 2010 market guidance of 40.7.

Yesterday, chief executive David Thomas said: "We are looking forward to 2011 when we will start to see the full benefit of the increase in cash flow from our new Bulgarian developments.

"This will provide the company with a very strong platform and allow us to re-focus on exploration and business development initiatives whilst reducing financial gearing".

At the end of last month the firm said it expected sales to double next year, helped by its newly producing fields in Bulgaria, which is expected to contribute half of its revenue.

The company – which has operations in Egypt, Bulgaria, Romania and Turkey – said the 2011 forecast was based on production from existing oil and gas fields in Egypt, Bulgaria and east Texas in the US.

Total capital expenditure was forecast at $112m (72.34m), and the company said it plans to secure one or more new business development opportunities during 2011 with the potential to add material reserves and value.

The shares in the firm – which has its headquarters in Edinburgh – have fallen since it started gas production in Bulgaria on November 4.