Salamander brings on new partner in Indonesia

Salamander Energy, the upstream oil and gas group on the FTSE 250, has reduced its stake in the Bangkanai Production Sharing Contract (PSC) in Indonesia to 70 per cent after a series of deals saw it take on a strategic partner at the project.

Salamander Energy, the upstream oil and gas group on the FTSE 250, has reduced its stake in the Bangkanai Production Sharing Contract (PSC) in Indonesia to 70 per cent after a series of deals saw it take on a strategic partner at the project.

The firm initially raised its stake in the Bangkanai PSC, Central Kalimantan, from 85% to 100% by acquiring the outstanding 15% interest through an asset swap with PT Medco Energi.

Salamander then farmed out a 30% holding to PT Saka Energi Indonesia for $27m cash, bringing its own operated interest down to 70%. Saka will now share in some of the development costs for exploration wells and subsequent appraisal wells.

The Bangkanai PSC contains the Kerendan gas field which is currently undergoing developmenet. Some 122.6bn cubic feet of gas (Bcf) has been committed for sale to date under a gas sales agreement with Indonesian state power company PLN. Meanwhile, a further 160 Bcf of contingent resource has been identified in the field, which is expected to come on stream in 2014.

The firm said that a number of prospects and leads have already been identified in the Bangkanai PSC and the West Kerendan prospect is due to be drilled in the second quarter of this year.

"We are very pleased to announce two transactions today that see us consolidate the remaining minority interest in the Bangkanai PSC and then welcome a strategic partner into one of our core areas," said Chief Executive Officer James Menzies.

"Although a new entrant to the upstream E&P sector, Saka bring clear expertise in the transportation and distribution of gas in the region. On the back of exploration success, they will prove to be a valuable partner in looking to tap new markets for gas. We are now looking forward to completing the Kerendan development drilling campaign and moving on to the next phase of exploration in the basin."

Recommended

Imperial Brands has an 8.3% yield – but what’s the catch?
Share tips

Imperial Brands has an 8.3% yield – but what’s the catch?

Tobacco company Imperial Brands boasts an impressive dividend yield, and the shares look cheap. But investors should beware, says Rupert Hargreaves. H…
20 May 2022
Investing in drugmakers: uncommon profits from curing rare diseases
Share tips

Investing in drugmakers: uncommon profits from curing rare diseases

Treatments for medical conditions with only a small number of sufferers can still be very attractive for pharmaceutical companies and investors becaus…
20 May 2022
Share tips of the week – 20 May
Share tips

Share tips of the week – 20 May

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
20 May 2022
Delivering profits: should you buy Royal Mail shares?
Share tips

Delivering profits: should you buy Royal Mail shares?

The volume of parcels delivered by Royal Mail soared during the pandemic, and so did its profits. But it has been coming under pressure lately. So, as…
19 May 2022

Most Popular

The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves looks at the FTSE 100’s top yielding stocks for income investors to consider.
18 May 2022
Imperial Brands has an 8.3% yield – but what’s the catch?
Share tips

Imperial Brands has an 8.3% yield – but what’s the catch?

Tobacco company Imperial Brands boasts an impressive dividend yield, and the shares look cheap. But investors should beware, says Rupert Hargreaves. H…
20 May 2022
Barry Norris: we’re already in the 1970s. Here’s how to invest
Investment strategy

Barry Norris: we’re already in the 1970s. Here’s how to invest

Merryn talks to Barry Norris of Argonaut capital about the parallels between now and the 1970s; the transition to “green” energy; and the one sector w…
19 May 2022