Drilling for oil/gas in S Asia 2008 could be year for increased production.




http://www.salamander-energy.com/

StockMarketWire.com

Salamander Energy said following a successful drill stem test (DST) in the top of the Upper Berai, the West Kerendan-1 exploration well is being suspended as a potential future production well.

The final cased hole DST in the top of the Upper Berai zone flowed at a maximum rate of 32.1 MMcfgpd and 296 bcpd from a 199 m interval between 2570m and 2769m true vertical depth sub-sea.

The combined flow rate from the Upper Berai zone achieved from this and the earlier DST (announced March 11th) exceeds 50 MMcfgpd and 477 bcpd making this by far the most productive well to date on the Kerendan trend.

The Drill Co. 1 rig will be released. Salamander Energy will commence discussions to incorporate the discovery into an enlarged Kerendan area development to supply potentially up to 70 MMcfgpd to the gas-fired power plant that is currently being constructed adjacent to the Kerendan field.

According to the FT today, Salamander has put itself up for sale, hence the rise in the sp. The sale is for the whole of the company or certain assets as 'packages'.

Salamander Energy announces its half year results for the six months ended 30 June 2014.

HIGHLIGHTS

OPERATIONAL
· Average daily production 11,800 boepd (1H 2013: 14,900 boepd), reflecting production downtime at start of year which reduced output by 2,800 boepd during the period

· Drilled 10 development wells in Bualuang field, East Terrace wells outperforming expectations

· Four additional slots added to the Bravo platform well bay

· Bualuang power and processing modules hooked up and commissioned, FSO now operational and receiving all crude production

· WK-1 discovery takes Kerendan field to over 1 TCF gas-in-place

· Kerendan Gas Processing Facilities construction now more than 70% complete


FINANCIAL
· Revenue of $177.8 million (1H 2013: $ 197.0 million)

· Pre-tax operating cash flow of $115.2 million (1H 2013: $147.0 million)

· Post-tax operating cash flow of $3.8 million (1H 2013: $96.0 million)

· Pre-tax profit of $66.4 million (1H 2013: $10.3 million)

· Post-tax loss of $27.9 million (1H 2013: $86.1 million loss)

· Calculated impact of the production outage on financials during the period: $53 million reduction in revenue and $39 million reduction in post-tax operating cash flow

· Net debt as at 30 June of $401.0 million (FY 2013: $259.9 million) with cash and funds of $154.1 million (FY 2013: $265 million)

· Gearing is expected to fall to c. 30% post completion of the SONA transaction (30 June 2014: 52%)


PORTFOLIO
· Reached agreement to sell 40% interests in B8/38 & G4/50 to Sona Petroleum Berhad ("SONA") for $280 million

· Price reflects over $19 per proved & probable barrel of reserves

· Reduces single asset exposure

OUTLOOK
· Full year 2014 average daily production forecast 13,000 - 15,000 boepd, with production in the second half to date averaging 15,300 boepd

· Current development drilling programme in Greater Bualuang to complete during 2H 2014

· Bualuang Charlie Platform to be sanctioned by Board in 2H 2014

· East Terrace Southern Culmination exploration well proposed to be drilled in Q4 2014

· EIA application for G4/50 submitted to Thai authorities, awaiting hearing

· Tutung Plan of Development (PoD) to be submitted to Indonesian regulator for approval

Chief Executive, James Menzies, commented:
"The first half saw significant resource additions at West Kerendan in Indonesia and an intense period of development activity in Indonesia and Thailand which is now coming to fruition. The FSP process resulted in a deal to crystallise value through the disposal of a minority stake in the Greater Bualuang area, which will allow us to return capital to shareholders, retire debt and free up resources to help further diversify the portfolio.

Looking forward our priorities continue to be to commercialise our resource base, generate step out exploration prospects near our principal assets and to complete the strengthening of our balance sheet while pursuing business development opportunities in our region."

Update on SONA Transaction
Following the recent announcement on 21 July concerning the transaction to divest of an interest in the Greater Bualuang Area, Salamander today announces that it has submitted a draft shareholder circular to the Financial Conduct Authority.

Salamander previously announced on 21 July 2014 the signing of an agreement under which Sona Petroleum Berhard ("SONA") would acquire an effective 40% working interest in the B8/38 concession (containing the Bualuang oil field) and the surrounding G4/50 concession, both located in the Gulf of Thailand (together the "Transaction").

Salamander understands that SONA is expecting to receive clearance from the Malaysian Securities Commission ("MSC") in the coming weeks. Once the MSC clearance has been received then both parties intend to seek their respective shareholder approvals in accordance with their contractual obligations under the SPA. Completion of the Transaction is conditional on, amongst other things, obtaining these approvals and is expected to occur before the end of 2014, in keeping with the timetable previously outlined.

Salamander Energy plc

The Board of Salamander Energy Plc notes the recent press speculation and confirms that it has received a conditional proposal from Ophir Energy plc ("Ophir") with respect to a potential offer for the Company, the terms of which Salamander is seeking to clarify. In addition, the Company is also in receipt of an approach from a consortium led by Compañía Española de Petróleos ("CEPSA") and Jynwel Capital (the "CEPSA Consortium"). The Board of Salamander has not received the detail of the CEPSA Consortium's proposal or confirmation that any offer will be forthcoming.

The proposals from Ophir and the CEPSA Consortium are subject to a number of conditions, including due diligence and the receipt of a unanimous recommendation from the Board of Salamander.

The Company is currently in discussions with both Ophir and the CEPSA Consortium in relation to their respective proposals. However, there can be no certainty that any offer will be forthcoming, or as to the terms of any such offer. Accordingly, shareholders are advised to take no action at this time.

StockMarketWire.com
Compania Espanola de Petroleos (CEPSA) noted on behalf of itself and Strategic Energy (Global) Limited (together, CEPSA Consortium) that the announcement made by Salamander Energy on Nov. 14 was made without its consent.

"The CEPSA Consortium continues to consider its position regarding a possible offer for the Company and the terms and conditions of any such offer, including any pre-conditions to making any such offer," it said in a statement.

"The CEPSA Consortium may decide not to proceed with an offer and accordingly there can be no certainty that an offer may be forthcoming. Any offer, if made, could be on different terms to those stated in the announcement of Salamander of 14 November 2014."

Canaccord note:
"CEPSA announced yesterday evening it has terminated talks with Salamander over a possible takeover and is now barred from making another offer within the next 6 months, except under the circumstances set out in Note 2 to Rule 2.8 (eg. if a 3rd party announces a firm intention to make an offer for Salamander).
As we understand it, Ophir is still free to make an offer for SMDR until the ‘put up or shut up’ date of 24 November. However, we do not expect Ophir to offer more attractive terms than the proposed offer previously made by CEPSA (121p/sh cash + up to 24p/sh cash conditional on future exploration success). It would appear to us that if Ophir makes an offer, this could enable CEPSA to come back: however, it is not certain they would.
We expect Salamander stock will fall further today, after falling 6.4% yesterday. Prior to the recent round of takeover discussions, Salamander traded as low as 75p/sh in mid October. Brent crude has fallen a further 6% since that time. In our view, Salamander should not fall to that level immediately as there is still time for a takeover offer to be made by Ophir, or another party.
Valuation
Our 121p/sh target price is set at a modest discount to our 124p/sh Central NAV at US$90/bbl crude, which is about in-line with the recent proposed offer.
Share performance catalyst
Further details of possible takeover offers, or the expiry of the ‘put up or shut up’ deadline on 24th November without a deal.

Operational and Corporate Update

Salamander Energy plc issues the following operational and corporate update that includes unaudited information and may be subject to further review.

Highlights
· 2014 average production of 14,200 boepd
· Bualuang field and the Sinphuhorm field both produced record high annual rates
· Kerendan Gas Processing Facility is nearing completion
· Renegotiations on the Kerendan gas sales agreement are expected to complete shortly with significantly more favourable terms
· Net debt as at 31 December 2014 of US$380 million with cash and funds of US$118 million
· Scheme Document in relation to the offer by Ophir Energy plc to be posted today; shareholders of Salamander and Ophir to vote on 6 February 2015; the Scheme expected to become effective 2 March 2015
· Intention to terminate the sale of an effective 40% interest in the Greater Bualuang Area with mutual agreement by SONA, satisfying a condition of the Ophir Offer

Chief Executive, James Menzies, commented:
"We are delighted to report that production has been strong in the second half of the year following the completion of the latest phase of Bualuang development. Measures taken to reduce Bualuang operating costs have been implemented and negotiations are underway on the Kerendan Gas Sales Agreement which we expect to result in significantly more favourable terms. In addition, we have today released documentation with regards to the offer from Ophir Energy plc which we expect will complete this quarter."

StockMarketWire.com
Ophir Energy has announced that at a general meeting the shareholders voted in favour of its proposed acquisition of of the entire issued and to be issued share capital of Salamander Energy.

Suspension of Listing and Trading in Salamander Shares
On 24 November 2014, the boards of Salamander Energy plc ("Salamander") and Ophir Energy plc ("Ophir") announced the terms of a recommended acquisition by Ophir of the entire issued and to be issued share capital of Salamander (the "Offer"), to be effected by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006 (the "Scheme"). The circular to shareholders of Salamander in connection with the Scheme (the "Scheme Document") was posted on 14 January 2015.

Pursuant to the terms of the Scheme and Listing Rule 5.3, Salamander announces that the listing of the Salamander Shares on the Official List and trading of the Salamander Shares on the London Stock Exchange has been suspended, effective from 7:30 a.m. today.