Melrose Resources provided a mixed update on recent drilling yesterday, but chief executive David Thomas insisted the oil and gas independent had been making good progress in all areas, writes Mark Williamson.

Melrose Resources provided a mixed update on recent drilling yesterday, but chief executive David Thomas insisted the oil and gas independent had been making good progress in all areas.

Edinburgh-based Melrose pleased investors with news of a gas discovery off Bulgaria, which initial estimates suggested could contain 24 billion cubic feet of gas.

The discovery was made on the same trend as the recent Kaliakra find, highlighting the potential of the area. Both finds lie close enough to the producing Galata field to be tied into that discovery, and Melrose hopes to take them into production by 2010.

Noting that Melrose had suffered costly reverses in deeper waters off Bulgaria, Thomas said the successes vindicated its decision to switch to shallower waters.

The success was offset by news that a well drilled to appraise the West Zahayra discovery in Egypt was dry, while drilling operations on the producing West Dikirnis field were delayed.

The shares fell7.5p to 233.5p.