Half Year Financial Results For the six months ended 30 June 2010

"Production, revenue & cash flow growth for the half year"

Salamander Energy, an independent upstream oil and gas exploration and production company focused on Asia, announces its half year results for the six months ended 30 June 2010.

HIGHLIGHTS

FINANCIAL

• Revenue up by 73% to $133.5 million (1H’09: $77.2 million)
• Operating cashflow up by 56% to $63.2 million (1H ’09: $40.5 million)
• Pre-tax loss of $90.3 million (1H’09: loss of $5.8 million)
• Pre-tax profit of $11.8 million (1H’09: loss of $5.8 million) adjusting for non cash items¹
• Funds as at 30 June of $168.8 million (FY ’09: $59.2 million)²
• Net debt at 30 June of $98.2 million (FY ’09: $119.3 million)
• Raised $100 million convertible bond issue

OPERATIONAL

• Average production increased by 25% to 16,000 boepd³(1H’09: 12,800 boepd); current daily production c. 20,000 boepd
• Completion of Phase IV of development drilling in Bualuang oil field
• Kambuna gas-condensate field reached full DCQ production
• Maintained excellent track record in HSE
• Deepened and broadened portfolio through increasing interest in Bontang PSC and Bengara-1 PSC, and with entry into block 101-100/04 in Vietnam

OUTLOOK

• Expect to complete acquisition of additional 40% interest in B8/38 licence in September 2010, taking interest to 100%
• On a proforma basis for the B8/38 acquisition average daily production in 2010 forecast to be over 20,000 boepd
• Further development of current portfolio forecast to deliver production of 30,000 boepd during 2013
• 2H 2010 drilling programme targeting 270 MMboe of net unrisked resource, 66 MMboe of net risked resource, in producing basins
• Fully funded exploration and appraisal programme

Commenting on the results, Salamander’s Chairman Charles Jamieson said:

"The first half of the year has been a busy period for Salamander, during which the group grew production, revenue and cash flow, secured funding for continued portfolio expansion and negotiated a major acquisition increasing our interest in a key asset we know well. While there were some drilling disappointments during the half year, the focus in the second half is on lower-risk prospects in producing basins and the Board is confident that Salamander is well positioned and fully funded to deliver further growth."

An audio recording of the analyst conference call will be made available on the IR section of the company website, http://www.salamander-energy.com/investor-centre.aspx, from Thursday 26 August.

¹ Non cash items comprise net impairment charges of $61.0 million (1H’09: nil) and exploration write offs of $41.1 million (1H’09: nil)
² Including restricted bank deposits of $13.4 million
³ All reserves and production are working interest unless otherwise stated

 

Enquiries:

Salamander Energy	020 7960 1580
James Menzies, Chief Executive Officer
Geoff Callow, Head of Corporate Affairs
Brunswick Group LLP	020 7404 5959
Patrick Handley
Fiona Micallef-Eynaud