UPDATE 1-Melrose Resources makes new gas discovery in Egypt

* Sees South Damas No. 1 well on stream within 6 months

* Sees initial rate in excess of 12 mmcfepd

* Initial reserves estimates 30 bcfe (Adds details)

Feb 5 (Reuters) -Oil and gas explorer Melrose Resources Plc (MRS.L: Quote) said it made a new gas discovery with good reservoir properties at an exploration well in Egypt.

The South Damas No. 1 exploration well in the South East Mansoura concession was expected to be on stream within six months at an initial rate in excess of 12 million cubic feet equivalent per day (mmcfepd), the company said in a statement.

Melrose said the well encountered the top reservoir at a depth of 4,345 feet and penetrated 76 feet of net gas pay.

It said the preliminary estimate of the discovered reserves was 30 billion cubic feet equivalent (bcfe), which was in line with the pre-drill analysis.

The company said the capital cost was $3.3 million.

Melrose said it planned to drill another well in the South East Mansoura concession after the completion of the South Damas No. 1 well.

Melrose also plans to drill an exploration well in the fourth quarter 2010 at its Mesaha block in Egypt, it said.

Shares of the company closed at 291.50 pence on Thursday on the London Stock Exchange. (Reporting by Shivani Singh in Bangalore; Editing by Maju Samuel)