Salamander announces that an insurance claim is on-going relating to the North Kutei drilling campaign. The campaign has so far resulted in the South Kecapi oil and gas discovery and a suspended potential gas discovery at North Kendang-1. Operations on the Bedug-1 exploration well continue.
As reported on 11 April 2013, the drilling of the North Kendang-1 exploration well was operationally challenging as a result of experiencing high pressures, in particular, a large amount of rig time being expended in getting the well back under control having taken a severe gas kick. Following discussions between Salamander, the Indonesian lead Insurer, the loss adjuster appointed by insurers and the Indonesian regulator, it has been concluded that the operational challenges involved may have given rise to valid insurance claims.
The Group’s insurance coverage for drilling operations is placed under two separate programmes that provide coverage for costs of well control, restitution of a well through re-drilling and separately for loss of third party down-hole equipment.
The insurance claims comprise three elements:
- recovery of costs associated with bringing the well under control following the kick;
- cost of contractor equipment lost or damaged by the well control incident; and
- costs involved in a re-drill of the North Kendang-1 well to the point where the kick was taken.
A claim totalling approximately $20 MM has been filed for the cost of well control and loss of contractor equipment with an application for an early interim payment. A further claim for the cost of re-drill of the well will be submitted in due course.
Final settlement of claims is not anticipated before end of 2013. Further announcements will be made on progress of the claim in due course.
+ 44 (0)20 7432 2680
James Menzies, Chief Executive Officer
Geoff Callow, Head of Corporate Affairs
+44 (0)20 7404 5959
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.