2011-01-11-2011-01-10-2011-01-10

Acquired Permian Basin assets in W TX & E NM primarily in Artesia, Jalmat Cone and Turner Gregory fields, gaining 830 BO/d & 500,000 Cf/d, 20.3 MMBO & 16.1 Bcf proved.

Privately held, Houston-based Quantum Resources Management LLC has acquired the Permian Basin assets of Melrose Resources Plc, London, (London: MRS) for $80 million in cash.

The assets are interests in mature oil field leases in West Texas and eastern New Mexico. The interests cover three main field areas, namely Artesia, Jalmat Cone and Turner Gregory, together with a number of smaller units. The fields are characterized by having long producing lives with relatively material reserves but with low production levels.

Total production is approximately 830 barrels of oil and 500,000 cubic feet of gas per day. Proved and probable reserves at year-end 2009 were 20.3 million barrels of oil and 16.1 billion cubic feet of gas on a working-interest basis

The assets required additional investment to further develop them, and Melrose determined to dedicate its capital resources to other opportunities. Melrose will use the proceeds of the sale to pay down debt and fund its capital work program.

The transaction excludes the Melrose leases in East Texas and the Fort Worth Basin.

Melrose chief executive David Thomas says, "The completion of the Permian Basin assets divestment is an important step for the Company and we are pleased that the sale process has yielded a satisfactory result. We are now focusing our resources on other initiatives which present more material growth opportunities and are better aligned with our core strategy."

Scotia Waterous was financial advisor to Melrose.