Press releases

Interim Management Statement

17 November 2011

Salamander Energy plc issues the following Interim Management Statement for the period from 1 July 2011 to 16 November 2011.

The Group has been realigning its portfolio in 2011 in order to focus on growth areas in and around core assets where it has a material, operated position and a leading understanding of the petroleum systems of the basin. Future capital expenditure will be targeted at these areas.


  • 2011 average production forecast in line with expectations at 18,000 – 19,000 boepd
  • Strategic realignment of portfolio increasing focus on core, growth areas
    • Disposal of mature ONWJ/SES PSC's realising $56.3 million
    • Acquired 100% interest in the G4/50 exploration licence, Gulf of Thailand
  • Ensco 53 Rig secured for further B8/38 drilling, expected on location January 2012
  • Contract signed for G4/50 3D seismic, acquisition expected to commence December 2011
  • Consortium tendering for rig share for multi-well programme in North Kutei
  • South Sebuku-2 successfully appraised, Plan of Development expected to be submitted 1H 2012
  • Jonathan Copus appointed Chief Financial Officer, joined October 2011

James Menzies, Chief Executive Officer, said: "The strategic realignment of our portfolio to focus on three core areas where we have material, operated positions and a detailed understanding of the geology of the basin, has made genuine progress during the period. We have a multiple-well drilling programme planned for the next twelve months that will see drilling in the Gulf of Thailand, onshore Kalimantan and in the offshore North Kutei basin each of which offer step change value creation potential."

Gulf of Thailand

The Group expanded its acreage position in the western Gulf of Thailand with the farm-in to Block G4/50 in order to earn a 100% operated interest (subject to government approval). Block G4/50 surrounds the Company’s B8/38 licence (Salamander 100%, operator) which contains the Bualuang oil field and the East Terrace oil discovery, and where the Group has a well-developed understanding of the petroleum system as well as extensive operating experience. G4/50 covers an area of approximately 11,500 sq km over the Western and Kra basins, and an existing 3D data set of over 1,500 sq km was acquired in 2009. The Group is planning to acquire a further 3,000 sq km of 3D seismic, which is expected to commence in December 2011 ahead of a multi-well drilling programme starting in 2H 2012.

In Block B8/38, the Ensco 53 jack-up rig has been secured for a drilling programme that will follow up the East Terrace oil discovery with exploration wells on the Bualuang Far East prospect and Bualuang NW Terrace cluster. The rig will also drill additional development wells on the Bualuang field. The rig is expected to be on location in January 2012 and anticipated to be on contract until May 2012.

East Kalimantan

During the period, the Group continued its technical analysis of the North Kutei basin including detailed work on Miocene-Pliocene slope channel play opened up by the Angklung-1 discovery well in the Bontang PSC (Salamander 100%, operator). In addition, the newly acquired and processed 3D seismic data over the SE Sangatta PSC (Salamander 75%, operator) was received in-house and interpretation is underway. Work to date on the extensive 3D seismic dataset has highlighted numerous large prospects with the potential for a multi-TCF gas resource across the acreage, along with a significant potential oil resource. These prospects lie in water depths of approximately 300 – 500 metres and would require a deep-water drilling unit in order to test them.

A multi-well drilling programme is planned to commence in 2H 2012. In order to minimise mobilisation costs and to attract a high quality drilling unit on competitive terms, the Group is working as part of a consortium that is tendering for a rig to be mobilised into Indonesia. The tendering process is underway with a view to securing a rig by year end.

Preparations are also well advanced for the drilling of the Tutung Alpha-3 appraisal well using the MB Century-28 land rig. Tutung is a c. 50 Bcf gas discovery which, given the domestic demand for gas in East Kalimantan, the Group believes can be commercial using a low-cost development approach. The Group has prepared a Plan of Development for submission following appraisal success.

The South Sebuku gas discovery in the Bengara I PSC (Salamander 42%) was successfully appraised during the period with the South Sebuku-2 appraisal well flow testing gas at an aggregate rate of 10.9 MMscfd. This well has now been suspended as a future producer and the operator is currently refining a Plan of Development for submission to the Indonesian regulator. This will be the Group’s second development in the Tarakan basin. Development of the South Sembakung field in the Simenggaris PSC is on-going with the field expected to be ready to deliver gas to the Bunyu Island Methanol plant from 2H 2012.

Central Kalimantan

Following the signature in 1H 2011 of the gas sales agreement for the Kerendan field in the Bangkanai PSC (Salamander 69%, operator), the DrillCo-1 land rig will shortly mobilise to the field location to drill development wells and exploration targets including the West Kerendan prospect. West Kerendan has significant resource potential in a carbonate build up which is a lookalike to the Kerendan field some 10km to the East, and will also test the underlying potential of Eocene clastic reservoirs in a large four way dip closure.

The Group has also been awarded two Joint Study Areas in the Barito basin adjacent to the Bangkanai PSC. Studies are on-going with local universities in order to review the exploration potential of the acreage. Once studies are completed, the Group will have a matching right on any bids the Joint Study Areas attract in future licensing rounds.


The Cat Ba-1X exploration well in Block 101-100/04, offshore Northern Vietnam, was completed in September 2011. The well encountered 38 metres of net oil & gas pay in the secondary Tertiary clastic objective. It was plugged and abandoned as a sub-commercial discovery. The Group is conducting a review of the prospectivity in the block at Tertiary level before determining the forward plan.

The Group completed the Dao Ruang-3 appraisal well in block L15/50, onshore Northeast Thailand during the period. Analysis of the well suggested it had limited potential as a producer and the decision was taken to plug and abandon the well.


Group production year to date has averaged 19,600 boepd and average daily production for the full year is expected to lie in the range of 18,000 – 19,000 boepd.

During the period, the Group completed the sale of its 5% minority interests in the ONWJ and SES PSCs, Indonesia. These PSCs both contain a large number of mature fields which require high levels of opex and maintenance capex. With both PSCs expiring within the next six years, the Group elected to divest these assets and re-deploy the capital into growth opportunities in its three core focus areas.

Another phase of Bualuang field development drilling was completed during the period with three new horizontal wells and two side-tracks. The new wells are all on-stream and the field is currently producing c. 9,000 bopd. Further development drilling is planned in the field for Q2 2012, ahead of the installation of the Bravo platform which is envisaged to take place mid-year 2012. Once the platform is installed, development wells will be drilled in 2H 2012 and 1H 2013 that will see production rise to average approximately 15,000 bopd in 2013.

Production from the Kambuna gas-condensate field has averaged 37 MMscfd and 2,500 barrels of condensate per day in the year to date. As expected, production from the field has now started to decline and since 1 July 2011 it has averaged 33 MMscfd and 2,100 barrels of condensate per day. This trend is forecast to continue until compression facilities are installed in Q1 2012.

Balance Sheet

At 11 November 2011, total Group debt, including the $100 million convertible bond, was $298.5 million and total available funds were $96.7 million. Net debt (including the convertible bond) as at 11 November was $201.8 million.


The year ahead looks set to be an active one with both development and exploration drilling taking place in all of our core areas.

In the Gulf of Thailand, exploration drilling will commence shortly on the B8/38 licence, targeting oil in prospects surrounding the Bualuang field. In the North Kutei basin, the MB Century 28 land rig is expected to mobilise to the Tutung location in December in order to drill the TA-3 appraisal well, while work continues on the exploration prospect inventory in the offshore Bontang and SE Sangatta PSCs. In addition, the DrillCo-1 land rig will mobilise this month for Kerendan field development and Bangkanai exploration drilling.

In early 2012, we anticipate further development of the Bualuang field as well as step out exploration drilling around the field. We will also be growing production further with the installation of the Bravo platform.

Looking further ahead into 2012, the focus will be on exploration drilling, targeting oil prospects in block G4/50 around the Bualuang field as well as high impact but low risk prospects in Bontang & SE Sangatta PSCs. On a technical level, these targets are of modest risk, but each of these activities has the potential for a step change in value creation terms.


Salamander Energy + 44 (0)20 7960 1580
James Menzies, Chief Executive Officer  
Geoff Callow, Head of Corporate Affairs  
Brunswick Group + 44 (0)20 7404 5959
Patrick Handley  
Fiona Micallef-Eynaud  

About Salamander Energy
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.