Salamander Energy announces its half year results for the six months ended 30 June 2014.

HIGHLIGHTS

OPERATIONAL

• Average daily production 11,800 boepd (1H 2013: 14,900 boepd), reflecting production downtime at start of year which reduced output by 2,800 boepd  during the period
• Drilled 10 development wells in Bualuang field, East Terrace wells outperforming expectations
• Four additional slots added to the Bravo platform well bay
• Bualuang power and processing modules hooked up and commissioned, FSO now operational and receiving all crude production
• WK-1 discovery takes Kerendan field to over 1 TCF gas-in-place
• Kerendan Gas Processing Facilities construction now more than 70% complete

FINANCIAL

• Revenue of $177.8 million (1H 2013: $ 197.0 million)
• Pre-tax operating cash flow of $115.2 million (1H 2013: $147.0 million)
• Post-tax operating cash flow of $3.8 million (1H 2013: $96.0 million)
• Pre-tax profit of $66.4 million (1H 2013: $10.3 million)
• Post-tax loss of $27.9 million (1H 2013: $86.1 million loss)
• Calculated impact of the production outage on financials during the period: $53 million reduction in revenue and $39 million reduction in post-tax operating cash flow
• Net debt as at 30 June of $401.0 million (FY 2013: $259.9 million) with cash and funds of $154.1 million  (FY 2013: $265 million)
• Gearing is expected to fall to c. 30% post completion of the SONA transaction (30 June 2014: 52%)

PORTFOLIO

• Reached agreement to sell 40% interests in B8/38 & G4/50 to Sona Petroleum Berhad (“SONA”) for $280 million
• Price reflects over $19 per proved & probable barrel of reserves
• Reduces single asset exposure

OUTLOOK

• Full year 2014 average daily production forecast 13,000 – 15,000 boepd, with production in the second half to date averaging 15,300 boepd
• Current development drilling programme in Greater Bualuang to complete during 2H 2014
• Bualuang Charlie Platform to be sanctioned by Board in 2H 2014
• East Terrace Southern Culmination exploration well proposed to be drilled in Q4 2014
• EIA application for G4/50 submitted to Thai authorities, awaiting hearing
• Tutung Plan of Development (PoD) to be submitted to Indonesian regulator for approval

Chief Executive, James Menzies, commented:

“The first half saw significant resource additions at West Kerendan in Indonesia and an intense period of development activity in Indonesia and Thailand which is now coming to fruition. The FSP process resulted in a deal to crystallise value through the disposal of a minority stake in the Greater Bualuang area, which will allow us to return capital to shareholders, retire debt and free up resources to help further diversify the portfolio.

Looking forward our priorities continue to be to commercialise our resource base, generate step out exploration prospects near our principal assets and to complete the strengthening of our balance sheet while pursuing business development opportunities in our region.”

Management will be holding a conference call for analysts at 9am this morning, a replay facility will be available on the company website later today.

Enquiries:

Salamander Energy
+ 44 (0)20 7432 2680
James Menzies, Chief Executive Officer
Geoff Callow, Head of Corporate Affairs

Brunswick Group
+44 (0)20 7404 5959
Patrick Handley
Elizabeth Adams