Oil and gas firm Melrose Resources is to spend $83m (£53.4m) next year in exploration and development work while continuing to reduce its debt levels.

The Edinburgh firm's exploration programme for next year comprises three exploration wells - two in Egypt and one in Bulgaria - and a seismic acquisition in Romania.

Melrose said it would spend $37m (£24m) on exploration wells in Bulgaria and Egypt and a seismic project in Romania.


Most of the rest will be used to develop its main fields in Egypt.

Melrose said its capital budget had been set at a level, which would allow it to continue cutting its debts.

It expects to reduce its gearing - the level of its net debt compared with equity capital - to below 100% by the end of this year and to 50%-60% by the end of 2012.

The BBC has reported that the first Egyptian well scheduled to be drilled will be Al Hajarisah-1 in the South East Mansoura concession, which is expected to begin drilling in the second quarter.

The second well in southern Egypt is scheduled to begin drilling late in the third quarter.

In Bulgaria, one well is due to be drilled in the central area of the Galata block.

(BMcC/GK)