They are:West Khilala number 2 well, which was drilled to a depth of 10,400 feet and tested at

25 million cubic feet a day (cf/d) of natural gas and 75 barrels

a day (b/d) of crude oil. Four

new appraisal wells are to be drilled, with two wells due to be drilled soon;West Dikirnis well number 2, which was drilled to 8,570 feet and tested at 2.25 million cf/d of gas and 2,234 b/d of crude oil. The well is estimated to have production capacity of 9,000 b/d; andWest Abu Khadra well number 1, which was drilled to a depth of 10,642 feet.

'We will select further appraisal/development wells from West Khilala and West Dikirnis as part of a fast-track development programme,' says Melrose chairman Robert Adair. 'Aggregate production from these fields is expected to reach about 100 million cf/d and 10,000 b/d by July 2007, with the potential to increase to 140 million cf/d and 20,000 b/d by the year end.'

In late April, Melrose said it had reached a conditional agreement to acquire the US' Merlon Petroleum for $265 million. Merlon owns a 50 per cent working interest in the El-Mansoura and Southeast el-Mansoura concessions and in nine development leases in the Nile Delta. 'The deal has been concluded and we have now assumed operatorship [of the concessions],' says Adair. The deal was financed by a loan facility arranged by Bank of Scotland.