Press releases

Interim Management Statement

19 November 2010

Salamander Energy plc, the Asia focused independent oil and gas exploration and production company, issues the following Interim Management Statement for the period from 1 July 2010 to 18 November 2010.


  • 2010 production guidance maintained at over 20,000 boepd (2009: 13,600 boepd). Group production forecast to rise to 30,000 boepd by 2013.
  • Continued successful exploitation of the Bualuang oil field, Phase 5 development to commence next month and tenders in preparation for the Bualuang Bravo Platform, exploration drilling imminent.
  • Continued expansion of the portfolio:
    • acquisition of the outstanding 40% of B8/38 in the Gulf of Thailand from SOCO International plc
    • acquisition of Elnusa Bangkanai Energy Ltd, providing a 69% operated interest in the Kerendan gas development in East Kalimantan, Indonesia.
  • 2011 planned programme of 11 exploration wells and 4 appraisal wells, with exploration drilling in new licences including
  • SE Sangatta PSC in the offshore Northern Kutei basin, Indonesia; Bangkanai PSC, onshore Barito basin, Indonesia; and
  • the Cat Ba prospect in Block 101-100/04 in the Haiphong sub-basin, offshore northern Vietnam.
  • Strong Balance Sheet maintained. Funds of $154 million available and net debt of $176 million as at 30 September 2010.

James Menzies, CEO of Salamander Energy said:

“We have maintained production guidance for the full year at over 20,000 boepd and our production forecast of 30,000 boepd by 2013. Looking to the future, the Group’s growing production base will support an active, diversified, multi-year exploration and appraisal drilling programme with material upside potential. The Company will also look to maintain its track record of value creation via acquisitive growth in the region.”


Salamander Energy plc +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  


Exploration and Appraisal

Vietnam & Lao PDR

In July the Group announced that the Tom Hum-Xanh-1 well in Block 31 of the Vinh Chau Graben offshore southern Vietnam did not encounter hydrocarbons and had been plugged and abandoned as a dry hole.

In August the Group announced that, after a fracture stimulation program, the Bang Nouan-1 exploration well in the Savannakhet PSC, Lao PDR had been plugged and abandoned. This well had previously encountered gas and had been temporarily suspended in February 2010 pending the fracture stimulation program. The prospects of a future commercial gas discovery in Lao PDR are considered slim, however the presence of gas has offered encouragement for several large prospects in Block L26/50, Thailand, which lies adjacent to the Savannakhet PSC and on the migration pathway.

The Group was carried for the cost of these two wells as they formed part of the farm-out deal with Origin Energy that was announced in December 2009.


In October 2010, Salamander announced that the Dambus-1 exploration well in the Kutai PSC, East Kalimantan, Indonesia had encountered gas-bearing sands and seen oil shows but in sub-commercial quantities. The well was therefore plugged and abandoned.

In October the Group also announced the spud of the Angklung-1 exploration well in the Bontang PSC and the Marindan-1 exploration well in the Kutai PSC. Operations on both wells are continuing with results expected in the coming weeks.

The Group has commenced an extensive 3D seismic acquisition survey on its operated Southeast Sangatta PSC in the Kutei Basin, offshore East Kalimantan, Indonesia. This data will be integrated with the Group’s two prior 3D datasets in the Northern Kutei Basin to provide support for choosing drilling locations ahead of the first exploration well on the licence in 2011.


Interpretation of the 3D seismic data acquired on the B8/38 licence in Thailand earlier in 2010 has both supported development drilling operations and increased the prospect inventory on the block. Preparations for the forthcoming exploration wells in the B8/38 licence are on schedule with the Bualuang East Terrace well expected to spud in mid-December which will be followed by the East Bualuang and North West Bualuang Terrace prospects in January.

As a result of recent heavy rains and flooding in North East Thailand, the preparations for the appraisal wells on the Dao Ruang field in the L15/50 licence have been delayed. The first of the two back-to-back wells is now expected to spud in late December.

Production and Development

The Group’s producing assets continue to perform to plan. In September the Group announced the acquisition of an additional 40% interest in the B8/38 licence from SOCO International and upgraded 2010 production guidance to 20,000 boepd. The Group remains on track to meet this production figure for the current year. Average daily production during 3Q was 23,600 boepd.

During the period, the Group has continued to progress its appraisal and development projects in the Gulf of Thailand and East Kalimantan that are expected to deliver production growth to at least 30,000 boepd by 2013.


Preparations for the forthcoming development drilling programme on the Bualuang field have been completed and operations are expected to commence in December 2010. This phase will see the platform expanded to accommodate the drilling of three new horizontal wells, and the sidetracking and recompletion of three of the existing production wells. It is expected that this phase of drilling will increase production from the field to an average of approximately 11,000 boepd in 2011.

Preparations have commenced for further development of the field and a second well head platform (the “Bravo platform”) is due to be ordered imminently for installation in 2012.

Meanwhile the realised price of oil sales from the Bualuang field is poised to rise after the signing of a new 12 month term contract with PTT. During the year to date, Bualuang crude has been sold at a price of Dubai minus $3.98. In 2011 the realised price will rise to Dubai minus $1.97.


In August 2010 the Group revised its reserve estimate for the Kambuna field, offshore North Sumatra. It reduced net entitlement proven and probable reserves by 1.8 MMboe (7.5 MMboe on a net working interest basis) as a result of observing faster than expected pressure decline in the Kambuna-3 well. Near term production and cash flow will not be impacted. Further drilling on the Kambuna block is planned for 2011 targeting satellite features that can be quickly tied into the Kambuna facilities.

Portfolio Management

In August the Group exited the SC41 block in the Philippines and further consolidated its position to 100% of the Bontang PSC, Indonesia, ahead of the drilling of the Angklung-1 well.

In August 2010 the Group announced that it had reached agreement with Soco International plc to acquire Soco Thailand LLC, which is the owner of the outstanding 40% of the B8/38 licence. The transaction closed in September 2010 and the Group now owns 100% of this licence, enabling it to maximise value from both further development of the Bualuang oil field and by pursuing step-out exploration opportunities.

In November 2010 the Group announced that it had agreed to acquire the issued share capital of Elnusa Bangkanai Energy Ltd, the owner of a 69% operated interest in the Bangkanai PSC located in the Barito Basin, onshore East Kalimantan, Indonesia. The Bangkanai PSC contains the Kerendan gas field, which has an approved Plan of Development and is expected to be on-stream by 2014. There is also in excess of 1Tcf of potential exploration upside on the PSC. Two exploration wells targeting in excess of 350 Bcf are planned for 1Q 2011.

Balance Sheet

During the period the Group has reduced its outstanding debt under the senior and junior reserves based lending facility from $167 million at 30 June 2010 to $156 million at 30 September 2010. The Group has in addition put in place a $90 million, 18 month bridge facility to fund the acquisition of Soco’s B8/38 stake in September 2010.

At 30 September 2010, total Group debt, including the $100 million convertible bond, was $331 million, total available funds were $154 million, and net debt (including the convertible bond) was $176 million.

Operational Outlook

The Group is presently focused on delivering the seven wells in Indonesia and Thailand that are due to be completed by end January, six of these are operated by the Group. Looking beyond January, the Group plans further exploration and appraisal wells during 2011 in East Kalimantan and offshore North Sumatra, Indonesia, Vietnam and Lao PDR. A total of 11 exploration and four appraisal wells are planned for 2011 to include the following (Salamander working interest in parentheses):

Indonesia: Nine E&A wells

  • Four E&A wells targeting East Kalimantan gas:
    • Two exploration wells on the Bangkanai PSC (69%);
    • one appraisal well on the Tutung discovery, Bontang PSC (100%),
    • one appraisal well on the South Sebuku discovery, Bengara I PSC (41%) in the Tarakan basin
  • Three exploration wells in the Kutei basin:
  • one well in the South East Sangatta PSC (75%), and
  • two in the Kutai PSC (23.4%)
  • Two exploration wells on the Kambuna PSC (50%), offshore North Sumatra

Thailand: Four E&A wells

  • Two appraisal wells on the Dao Ruang Gas discovery, L15/50 (50%) onshore Khorat basin
  • Two exploration wells in Block B8/38 (100%) offshore Gulf of Thailand

Vietnam: One exploration well on the Cat Ba prospect, Block 101-100/04 (50%) offshore Northern Vietnam

Lao PDR: One exploration well on the Bang Hiang oil prospect on the Savannakhet PSC (30%)


Overall, the Group’s growing production base will support an active, diversified, multi-year exploration and appraisal drilling programme with material upside potential. The Company will also look to maintain its track record of value creation via acquisitive growth in the region.