Melrose Resources surged back into the black in the first half when strong growth in output helped the firm put last year�s exploration reverses in Bulgaria behind it.

Melrose Resources surged back into the black in the first half when strong growth in output helped the firm put last year's exploration reverses in Bulgaria behind it.

The Edinburgh-based oil and gas independent made operating profits of $152m (£83m) in the six months to June, after losing $17m in the same period last year when costly wells drilled in deep waters off Bulgaria were dry.

David Thomas, chief executive, highlighted what he called a sea change in the financial performance of the firm, which now has a number of producing assets in Egypt and the US. These mean the company is well placed to cope with the end of production from the Galata gas field offshore Bulgaria next year.

The company's other fields are capable of generating plenty of cash which could be invested in helping to develop operations including early stage exploration efforts in Turkey and Egypt of which Melrose has high hopes.

In Bulgaria, Thomas said Melrose had made good progress towards finalising plans to turn the Galata reservoir into a huge gas storage facility. The company hopes to agree terms for the scheme with Bulgarian authorities in time to start injecting gas into the field next year.

In the first six months Melrose tripled revenues to $234m from $76m last year. Average production increased by 47% to 21,300 barrels of oil equivalent daily.

While Melrose benefited from higher prices for hydrocarbons, gains were limited because the bulk of the group's production is gas sold on long-term fixed-price contracts in Egypt.

The company made two discoveries in Egypt and one in the US in the first half.

Chairman Robert Adair said Melrose had already found reserves to replace 150% of forecast full-year production. It will drill six prospects by the year end.

The company said it was introducing an interim dividend, of 1.2p per share, to reflect its strong financial performance.