Melrose II

completed

Melrose Resources plc (Melrose or the company) is an Edinburgh based oil and gas exploration and production company with operations in Bulgaria, Egypt, France and the United States. Melrose has a balanced portfolio of producing assets, development projects and exploration interests. The company holds a 100% interest in the Bulgarian Galata field through its wholly owned subsidiaries Melrose Resources Sarl and Petreco Bulgaria EOOD, and is also exploring in four adjacent offshore exploration concessions. In Egypt, Melrose currently has 54%, 50% and 50% interests, respectively, in the Qantara, El Mansoura and South East El Mansoura concessions, all located in the onshore Nile Delta. Melrose’s partner and the operator in all three concessions is Merlon Petroleum Company (Merlon), a privately held US company with assets in Egypt and the US. Melrose also has mature assets in the Permian basin in the US and exploration assets in offshore France. Melrose has proposed to acquire Merlon for a cash consideration of $265 million, thus increasing its interest to 100% in all three Egyptian concessions. The acquisition is expected to double Melrose’s Egyptian reserves and slightly increase its US reserves. The company is planning to raise both debt and equity to finance the Merlon acquisition, refinance existing debt of both companies, and support Melrose’s capital expenditure program over the next few years.