At the Group’s Annual General Meeting to be held later today, Charles Jamieson, Chairman of Salamander Energy will make the following statement:
“In 2010 the Group delivered another year of production and cash flow growth with production increasing by 49% to 20,300 boepd and operating cash flow up 108% to $174.4 million. Group production is currently running at approximately 21,500 boepd. As announced yesterday, development drilling on the Bualuang field is well underway. Two of the development wells that were drilled as part of the current programme are now on-stream, with three more wells will be completed and brought on stream in the coming weeks which will lead to further production growth in the second half of the year.
We have taken several steps to exploit the potential in our B8/38 licence in the Gulf of Thailand. In the third quarter of 2010, we bought our minority partner out of the licence. We have since added further value to this acreage both through a reserves upgrade on the Bualuang field which we announced in the first quarter of 2011 and the success of the Bualuang East Terrace exploration well, announced yesterday, which will add between 8 and 14 million barrels to the field.
Elsewhere in our portfolio, in 4Q 2010, we completed the acquisition of a 69% operated interest in the Bangkanai PSC, East Kalimantan for $11 million. We announced today that a Gas Sales and Purchase Agreement has been signed for 130 trillion btu of gas from the Kerendan gas field (contained within this PSC) which demonstrates significant value creation and enables the Group to book an additional 16.5 MMboe of proved reserves. There is further exploration upside on this licence and exploration drilling is expected to commence in the third quarter with two wells, Sungai Lahei and West Kerendan, scheduled for drilling before the end of the year.
At the end of 2010, the Group successfully completed the Angklung-1 exploration well in Bontang PSC, East Kalimantan, Indonesia. This opened up a new play in the Northern Kutei basin where, through its interests in the Bontang and SE Sangatta PSC’s, the Group is the dominant acreage holder. Following extensive technical work on the discovery and its implications for the basin, we are planning an extensive drilling campaign in the area, and are aiming to start in the fourth quarter of this year.
Salamander expects to spud the Cat Ba exploration well in Vietnam, in July 2011. This is a 100 MMbbl oil prospect on which we recently completed a farm out to JX-NOEX, reducing our financial exposure to the well whilst retaining material exposure in the event of a discovery.
Taken together, our exploration and appraisal plans in the second half of the year will see drilling in Thailand, Indonesia and Vietnam targeting approximately 250 MMboe of net unrisked resources or over 90 MMboe of net risked resource.
Nick Cooper, Chief Financial Officer and one of the co-founders of Salamander, left the Company in May 2011. On behalf of the Board I would like to thank Nick for all his efforts in helping to establish Salamander as the leading Asian focussed independent E&P company and wish him well in his future endeavours. The search for a replacement is ongoing and the Group will update the market in due course.
With commodity prices remaining strong, and having completed a refinancing of our debt facility in H1 2011, Salamander’s balance sheet is robust and the Group is generating significant cash flows from a production base that is expected to grow to 30,000 boepd by 2013.”
|Salamander Energy||020 7960 1580|
|James Menzies, Chief Executive Officer|
|Geoff Callow, Head of Corporate Affairs|
|Brunswick Group LLP||020 7404 5959|
Salamander is an Asia focussed, independent, FTSE 250, upstream oil and gas exploration and production company. Salamander has a balanced portfolio of production, development and exploration assets with interests located in Indonesia, Thailand, Vietnam and Lao PDR.