Salamander Energy plc issues the following Interim Management Statement (IMS) for the period from 1 July 2012 to 15 November 2012.

Highlights

• Bualuang Bravo platform installation and commissioning completed
• Atwood Mako rig currently en-route to Bualuang Bravo platform
• EIA permits for prospects in north of G4/50 have been transferred into Salamander’s name
• DrillCo-1 rig arrived on location at Kerendan field and commenced development drilling
• Ocean General rig expected to commence exploration drilling in North Kutei in December 2012
• 2012 average production forecast maintained at 10,500-11,500 boepd
• High impact exploration programme in 2013 spread across North Kutei, Greater Bualuang and Greater Kerendan areas

Production and Development

Thailand

During the period the Group continued its investment into the Bualuang field to drive future production and cash flow growth. Installation and commissioning of the Bualuang Bravo platform has been completed and the Atwood Mako rig is en-route to the platform and will shortly commence an extended 16 well development drilling programme. This will drive average production from the field higher; output expected to rise by at least 50% in 2013 to between 11,000 and 14,000 boepd. The next phase of infrastructure investment is focused on driving down operating costs, and will see the addition in 2014 of processing facilities and power generation. Operations on these projects commenced during the period with first steel cut on the power modules and bids received for the FSO.

The Group reiterates its 2012 average daily production forecast of between 10,500 and 11,500 boepd.  Average daily production for the year up to 15 November is 10,600 boepd and average daily production during the current month to date is 11,700 boepd.

Indonesia

Looking beyond Thailand, further production growth will be delivered from the Kerendan field. The DrillCo-1 rig arrived on location in August and is currently batch-drilling three development wells. On completion of the development drilling, the Group expects to be in a position to commercialise up to 160 Bcf of additional resource; this volume is above and beyond the 120 Bcf of 2P reserves that are already the subject of a gas sales agreement with PLN.

Exploration and Appraisal

Thailand

In the Greater Bualuang area, the Group has completed the initial interpretation of 5,000 sq. km’s of 3D seismic that has been gathered across the G4/50 licence. Preliminary mapping on the data has identified over 20 prospects. These lie within the 20 to 80 MMbo range, with chances of success expected to be c. 30% once the prospects are matured. A number of these prospects are drill-ready, and a minimum of six exploration wells are expected to be drilled on this acreage during 2013.

Preparations for drilling are moving at pace, and this week, the Company received environmental permits for six locations in the north of the licence area. In the southern area of the G4/50 license, applications for environmental permits are at an advanced stage with all documentation expected to be submitted around year-end.

On B8/38, one exploration well was completed during the period; this was located on the relatively small Bualuang North West Terrace-1 prospect. The well encountered thin oil-bearing early Miocene T2 sandstones below 1,725 metres TVDSS. Well-developed sections of both the T5 and T4 mid-Miocene sandstones were found to be water-wet. The initial conclusion is that the sand-rich section of the T5 has led to leakage across the bounding fault at this location. However, the Group took the opportunity to side-track the well into the undrilled northern portion of the Bualuang oil field; this with the aim of calibrating the field model ahead of development drilling. This side track encountered oil bearing sands in the main T4 reservoir that were two metres higher than prognosis.

Onshore Northeast Thailand, a commerciality and production area has recently been approved for the Dong Mun field.  The Dong Mun-3 well is currently undergoing a long term flow test and has flowed at a stabilised rate of 9 MMscfd over a sixteen day period. The operator is currently preparing a plan of development for the field which is expected to be submitted early in 2013. There is an analogue prospect to the north west of Dong Mun which the operator is considering as an exploration target for drilling in 2013.

Indonesia

The drilling programme in North Kutei remains on schedule to start in December 2012.  There are over 28 leads and prospects mapped across the Bontang and SE Sangatta PSC’s. South Kecapi is the first well in a potentially high impact programme, and will be followed by the North Kendang and Bedug wells; a programme that will test combined mean prospective resource of 1.4 Tcf of gas and 189 MMbo. The Group is part of a four member consortium that has contracted the Ocean General semi-submersible rig. The rig is currently active in the Natuna Sea for the second member of the consortium and is expected to arrive at the South Kecapi well location in early December.

In Greater Kerendan, forestry permits have now been awarded for the West Kerendan drilling location. Preparation of the West Kerendan drill pad will now follow, with the West Kerendan and Sungai Lahei prospects expected to spud early in 2013. Together, these prospects target c. 900 Bcf of un-risked prospective resource.

Balance Sheet

At 31 October 2012, total Group debt, including the $100 million convertible bond, was $270.8 million, total available funds were $114.2 million, and net debt (including the convertible bond) was $156.7 million.

 

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          

 

About Salamander

Salamander Energy is an independent upstream oil and gas exploration and production company listed on the main market of the London Stock Exchange (Ticker: SMDR) and is a constituent of the FTSE 250 index. The Group is focused on growth assets in and around three core areas: Greater Bualuang, Gulf of Thailand; North Kutei, Indonesia; and Greater Kerendan, Indonesia. In each of these areas the Group has a material, operated position and a detailed understanding of the petroleum systems of the basin.