Melrose, created in 1997 in a management buyout and still majority controlled by Chairman Robert Adair's family after stock market fundraisings this year, reported a net loss for the first half of 311,000 pounds ($487,100), narrowed from a loss of 1.68 million a year ago. "The way things are going we will probably make a small profit this year as more production comes on, but things will really happen next year as the new fields come in," Chief Executive David Curry said in a telephone interview. With the South Batra field in Egypt and the Galata field off Bulgaria's coast scheduled to start up next year. "We should have very strong cashflow and the company will be transformed." The company's shares rose five percent to 142 pence at 0950 GMT after the results, in which the company said it expected first production from Galata would be in January 2004. Curry said he did not expect to go back to shareholders for more funds in the foreseable future as the Egyptian and Bulgarian assets should become self funding. "Cash flow from both fields should be very significant and we would not expect to be going back to shareholders for funds," he said. Curry said Melrose wanted to do more drilling at its El Mansoura Egyptian development, where estimated reserves are large by the standards of such a small company. But he said that at some stage next year it would likely sell the assets on to one of the larger companies moving into the country. "There's no doubt that the bigger companies are loking to expand in Egypt. BG (BG.L), Apache, RWE (RWEG.DE), they're all hungry for assets. What we would like to do, is do a bit more drilling to demonstrate the potential, but this time next year, if the right price was there, Egypt would go." P.I.N./Reuters