Melrose Resources Amends Bulgarian Gas Fields' Contracts

Melrose Resources has today announced that it has signed amendments to its gas sales contracts for the Kaliakra and Kavarna fields in the Galata Block, Bulgaria.

The amendments cover the planned 2012 production volumes from the two fields and are amended with Bulgargaz, Bulgaria's state-owned gas company, and Agropolychim, an independent industrial consumer.

Amendments to the contracts revise upwards the price payable for gas in 2012, at an average price of $8.32 per million cubic feet (Mcf) (assuming an exchange rate of €1.30), as opposed to $7.35 per Mcf in 2011. Melrose says the nominations for the contract reflect a total gas volume of 12 billion cubic feet.

"The new gas sales arrangements represent a material price improvement and will underpin Melrose's cash generation this year," Chief Executive of Melrose David Thomas said.

"Our Bulgarian and Egyptian revenues will allow the company to pursue an active work programme during 2012, whilst continuing to reduce financial gearing to below 60 per cent by the end of the year."