Melrose cuts production estimates for second time

OIL and gas explorer Melrose Resources has reduced its full-year production estimate for a second time this year after setbacks in Egypt.

The Edinburgh-based firm said operational factors in the north African country had affected its average production for the first half of 2011. As a result, it dropped its full-year production estimate to 36,000 barrels of oil per day.

It said issues in Egypt were being addressed through remedial drilling and a workover programme.

It added, however, that it made good progress on another concession in Egypt, with a first test well planned for later this year. Pre-tax profits rose to £37.7million, up from £16million in the first half of 2010. Revenue increased to about £95million, against £67million 12 months earlier.

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AP Moller-Maersk said yesterday its production in the North Sea slid 26%, primarily as a result of the shutdown of its Gryphon field after storm damage to a production vessel in February. Operations are not due to restart until the second quarter of 2012 while repairs are carried out.

The shipping and energy company added that construction on its £611million Golden Eagle development was due to begin late this year, with first production due in 2014, and said sales for the first half of 2011 rose 9% year-on-year to £18.2billion.