Production drop hits Salamander profits

Profits plunged at Salamander after disposals led to a big drop in production in the first half of the year.

Pretax profit slumped 75% to $15.9m for the six months to the end of June, from $62.4m the year before, while revenues were down 4% to $179.4m.

Production fell to 10,700 barrels of oil equivalent per day (boepd) from 19,600 boepd in the first half of 2011.

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

This followed the disposal of Salamander's low-margin barrels in Offshore Northwest Java and Southeast Sumatra last year.

Last week the company cut its full-year average production forecast to 10,500 - 11,500 boepd from 12,000 - 13,000 boepd.

However, it said forthcoming development drilling on its Bualuang field and East Terrace site would drive production growth into 2013, while drilling at its Kerendan development should lead to further production growth into 2014.