Salamander Energy Plc provided an update Monday that further to the Heads of Agreement June 5, the company announced that a definitive Share Sale and Purchase Agreement has now been signed with Sona Petroleum Berhard (Sona) to dispose of an effective 40 percent working interest in the B8/38 concession containing the Bualuang oil field and the surrounding G4/50 concession, both located in the Gulf of Thailand (together the Transaction).
Proposed Transaction Terms
Under the terms of the Transaction:
Mitsui Oil Exploration Co Ltd (MOECO), from whom Salamander acquired its 100 percent interest in G4/50, holds back-in rights to up to 50 percent of the concession while the license is in its exploration phase. In the event that MOECO exercises its back-in rights, Salamander’s and Sona’s effective working interests will each be diluted in proportion to their ownership in G4/50 (being 60 / 40).
The Transaction remains conditional, amongst other things, on approval by Salamander’s shareholders and Sona receiving regulatory approval from the Securities Commission of Malaysia and approval by its shareholders. The consideration will be met by Sona via existing cash resources and financing arranged with BNP Paribas the final documentation of which is a condition to closing of the Transaction. The Transaction is not subject to any other regulatory approvals.
The Transaction is in line with the Group’s stated strategy of active portfolio management to realize value from its assets over time. In particular the sale:
The B8/38 concession is located in the Gulf of Thailand and contains the Bualuang oil field. The field was brought on-stream in 2008 and to date has produced over 17 million barrels of oil. It has two production platforms, Alpha and Bravo, and a Floating, Production, Storage & Offtake vessel (FPSO) which processes and stores Bualuang crude and from which cargoes are offloaded on a regular basis. Gross daily production in 2014 is expected to average between 11,000 and 14,000 barrels of oil per day (bopd).
The field is currently undergoing a phase of development drilling and infrastructure upgrade, with wells being drilled from the Bualuang Bravo Platform. The Bualuang FPSO is to be replaced with a Floating, Storage & Offtake vessel (FSO) and the Bualuang crude will be processed using newly installed modules located on the Bravo platform. The FSO is currently in the field awaiting hook up, once the facilities upgrade is completed, it is expected to result in substantial savings in operating costs.
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