Salamander changing focus, enjoys success in Indonesia

South-east Asia-focused oil and gas group Salamander Energy has undergone a strategic realignment of its portfolio, increasing its focus on core growth areas during the second half of this year.

Production for the year to date has averaged 19,600 barrels of oil equivalent per day (boepd), with average daily production for the full year expected to lie in the range of 18,000 - 19,000 boepd.

At the Kambuna gas-condensate field, production is currently averaging 33m standard cubic feet per day (mmscfd) and 2,100 barrels of condensate per day in an expected trend of decline which is forecast to continue until compression facilities are installed in the first quarter of 2012.

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At 11 November total group debt, including a $100m convertible bond, was $298.5m and total available funds were $96.7m.

The company said exploration drilling will commence shortly on the B8/38 licence in

the Gulf of Thailand, targeting oil in prospects surrounding the Bualuang field.

In early 2012, the group anticipates further development of the Bualuang field as well as step out exploration drilling around the field.

"Looking further ahead into 2012, the focus will be on exploration drilling, targeting oil prospects in block G4/50 around the Bualuang field as well as high impact but low risk prospects in Bontang & SE Sangatta," the company said.

In a separate announcement, the company said its South Sebuku-2 appraisal well in Indonesia had been a success. The test drilling encountered more than 15 metres of net gas-bearing sandstones.

"Today's announced results from South Sebuku-2 appraisal well confirm the development potential of South Sebuku and were not unexpected," noted Westhouse Securities, a broker specialising in resource stocks. "Otherwise, operations are performing in line with management expectations," the broker noted, adding that it retains its "hold" recommendation on the shares.

The share price fell 0.19% to 210p by 13:00.

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