Melrose Resources plc , the oil and gas exploration, development and production company, today announces that it has agreed to farm-out 30 percent of its equity in the Est Cobalcescu exploration concession offshore Romania to Beach Petroleum S.R.L.
Following completion of the transaction Melrose will retain operatorship and a 40 percent working interest in the Concession, with Beach and Petromar Resources S.A. (“Petromar”) each holding a 30 percent working interest.
Under the terms of the transaction, Beach will pay its proportionate share of past costs on the licence and carry Melrose’s share of the recently completed 3D seismic survey, representing an amount of approximately $4.8 million. The net effect of the cost carry and new equity arrangements will be to reduce Melrose’s 2012 capital budget by around $8.4 million and the Company’s drilling costs over the following two years by an estimated $16 million.
The transaction is subject to the formal approval of the Romanian National Agency of Mineral Resources.
David Thomas, Chief Executive, said: “We are pleased to announce the farm-out which is consistent with our strategy to align the Company’s working interests in Est Cobalcescu and the neighbouring Muridava concession at 40 percent. Both licences offer material exploration potential in an under-explored region of the Black Sea, however, it is prudent at this stage to share some of the investment risks on the multi-well drilling program planned on the blocks over the next two years. We welcome Beach to the joint venture partnership and look forward to expanding the business relationship between our companies over future years.”
Press Release, September 10, 2012