Salamander fires up a rights call

published 27 April 2012

Salamander Energy, the independent upstream oil and gas exploration and production business focused on South-East Asia, is asking its shareholders to put their hands in their pockets to accelerate its drilling programme.

The company is looking to raise around $201m (net) through an underwritten rights issue of 100.7m shares, which shareholders can buy at 130p each on the basis of 13 new shares for every 20 shares held.

Salamander has earmarked the funds for three main areas. The first is the enhancement of the Bualuang oil field in the Gulf of Thailand through the addition of platform-based oil processing facilities which are expected to reduce operating costs, extend the economic field life and potentially release further recoverable oil volume;

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The group also wants to contract a second rig in the Gulf of Thailand to accelerate exploration and appraisal drilling. The plan is to drill at least six exploration wells in parallel to the development drilling programme to be undertaken by the Atwood Mako rig.

Most intriguing of all is what the group calls investment in a "potentially transformative exploration drilling campaign" in the North Kutei Basin, Indonesia.

"The board believes that Salamander is very well positioned to create and capture value for shareholders and we look forward to a busy and productive programme," said James Menzies, Chief Executive of Salamander Energy.