Melrose Resources, the oil and gas independent, put a brave face on the recent plunge in oil prices and said it had enough money in place to pursue its exploration and development plans.

Melrose Resources, the oil and gas independent, put a brave face on the recent plunge in oil prices and said it had enough money in place to pursue its exploration and development plans.

While the steep fall in oil prices, from $147 per barrel in July to around $57 yesterday, has caused widespread concern in the industry, Edinburgh-based Melrose said it would benefit from the fact that most of its production is gas.

The bulk of this is sold under long-term contracts at fixed prices, an arrangement which could have made Melrose's earnings appear relatively pedestrian when oil prices were booming.

However, in an interim management statement,the company noted that the fact that 74% of third-quarter output was fixed-price gas had helped to put a floor under revenues.

The impact of declining oil prices was limited by the fact that under the production sharing con- tracts that affect its opera- tions in Egypt, the company receives a bigger share of oil output when prices fall.

By the same token, it gets a smaller share when prices rise.

The same contractual feature will help other UK firms which have production sharing contracts overseas.

As Melrose is operator of its Egyptian interests, the company can decide the timing of investments to suit conditions.

In the third quarter, total net entitlement production from Melrose's interests in Egypt, Bulgaria and the USA increased by 6% on the same period last year, to 14.8 thousand barrels oil equivalent daily.

Chief executive David Thomas said the cash generated from operations combined with facilities secured before global credit markets seized up in the third quarter "will ensure that the company is able to finance its planned investment programme going forward".

In coming months Melrose will drill wells in Egypt, the US and Bulgaria.

It is progressing plans to turn the Galata gas field off Bulgaria into a storage facility.