Salamander Energy buys Mitra Energia from Sound Oil

Salamander Energy, the FTSE 250 oil and gas group, has agreed to acquire the share capital of Mitra Energia Bangkanai from AIM-listed group Sound Oil.

Mitra has a five per cent holding in the Bangkanai production sharing contract (PSC), located in Indonesia, boosting its stake in the licence to 85 per cent.

Following the purchase, Salamander's proved reserves will increase by 1.2m barrels of oil equivalent (boe), while contingent resources net to the group will increase by 1.6m boe.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

The consideration for Mitra is comprised of an initial $4.5m cash payment, a further conditional payment of $1.1m cash, and a contingent payment of $1.5m from revenues associated with production from a future discovery in the PSC.

The PSC contains the Kerendan gas field which is undergoing development and is expected to be on stream in 2014.

To date, 122.6bn cubic feet have been committed for sale under a gas sales agreement and a further 160bn cubic feet of resource has been identified in the field for further commercialisation.

The share price rose 0.58% to 173.30p by 09:25.

NR