At the Group's Annual General Meeting to be held later today, Charles Jamieson, Chairman of Salamander Energy will make the following statement:
"During 2011, Salamander made significant progress in a strategic realignment of its portfolio to focus on three areas that will be the engines of future growth. These are Greater Bualuang, Gulf of Thailand; Greater Kerendan, Central Kalimantan, Indonesia; and the North Kutei, East Kalimantan, Indonesia. The Group successfully raised a net US$201 million in April through a rights issue which will allow the Group to accelerate its drilling programme and aggressively pursue the material upside in these three areas.
As part of the portfolio re-alignment, the Group divested of non-core minority interests in the ONWJ and SES PSCs in Indonesia, and withdrew from Vietnam. The Group continued to build its interests in its core areas, through increasing its equity interest in the Bangkanai PSC, Greater Kerendan, and acquiring an operated interest in the G4/50 licence in the Greater Bualuang area, Gulf of Thailand.
During 2011, the Group generated post tax operating cash flow of $194 MM that contributed to a year-end cash position of $86 MM. This was further strengthened during 1H 2012 with the completion of the $201 MM Rights Issue. This will enable the Group to invest in processing facilities for the Bualuang Bravo Platform that will facilitate a reduction in operating costs of c. $25 MM per annum over the life of the field; commit to a four well drilling programme in the North Kutei; and contract a second rig for exploration drilling in the Gulf of Thailand.
All three core areas will be the focus of exploration drilling in 2012, with the programme in the Gulf of Thailand commencing last week with the Bualuang Far East-1 well. The Group is in the process of tendering for a second rig on long term contract with the intention of using it to commence exploration drilling in the G4/50 licence before the end of the year.
In the North Kutei area, ISIS Petroleum Consultants completed a Competent Persons Report that assessed that the four most drill-ready prospects contain 676 MMboe of gross mean unrisked potential resource (534 MMboe net to Salamander). As per the announcement made last week, the Group is part of a rig sharing consortium that has contracted the Ocean General semi-submersible rig with the intention to commence exploration drilling in 4Q 2012.
Finally, in the Greater Kerendan area, the DrillCo-1 land rig has been barged up the Barito River and is currently being moved from the staging areas to the drill site. Development drilling is expected to commence in July 2012 followed by exploration drilling before the year end.
Salamander’s exploration programme will continue through 2012 and 2013, targeting compellingly high impact, yet low to mid risk prospects. This, together with a growing production base driven by further development of the Bualuang oil field and expected first gas from the Kerendan field, and a strong balance sheet, give the Board a keen sense of optimism and anticipation for the coming months."
James Menzies, Chief Executive Officer
Geoff Callow, Head of Corporate Affairs
020 7432 2680
Brunswick Group LLP
020 7404 5959