Under the terms of the agreement, which is still subject to approval by partners and the Philippine Government, Salamander will earn a 35% interest in SC41 by carrying the partners through a 3D seismic program.
The SC41 partners plan to acquire a minimum of 600 square kilometers of 3D seismic during the second quarter of 2007 ahead of drilling anticipated in 2008. The seismic vessel has been contracted and is due to mobilize in April. A number of leads with the potential for oil accumulations in the 50 to 150 million barrel range have been identified from existing 2D seismic data. These structural leads are located on a prospective deepwater fold belt, along trend from the Wildebeest-1 exploration well, located in SC41 and which discovered 40o API oil in 2000.
James Menzies, Chief Executive Officer of Salamander Energy, commented:
"As a proven, but lightly explored Borneo basin, the Sandakan, and SC41 in particular, offers significant potential. This agreement adds another exciting exploration element to our balanced portfolio across South East Asia, and complements the current production base of approximately 7,500 boepd."
SC41 is located in the Sandakan basin, an East Kalimantan basin that contains a prospective deepwater fold belt and covers an area of approximately 4,820 square kilometers with water depths ranging from 200 to 2,000 meters. To date six wells have been drilled in the block, with one located in the fold belt, Wildebeest-1, which discovered 40-degree API oil and gas in 2000.
SC41 is operated by Tap Oil, who will retain a 50% equity interest following completion of the farm-in.
Salamander is an independent upstream oil and gas exploration and production company focused on Southeast Asia. Since its formation, Salamander has built a balanced portfolio of production, development and exploration assets with interests principally located in Indonesia and Thailand. The Company listed on the main board of the London Stock Exchange in December 2006, raising approximately £120 million of new funds.
Salamander has a clear strategy of acquiring and developing high quality oil and gas producing assets that provide potential near-term value and cash flow growth, and exploring in proven, but under-explored and overlooked frontier basins. Its current assets are located in Southeast Asian basins where Salamander believes it can further exploit its geological knowledge.
Salamander's current assets include:
Block Operator Net Equity Activity Offshore North West Java PSC, Indonesia BP 5% Production South East Sumatra PSC, CNOOC 5% Production Indonesia EU1, Thailand Hess 9.5% Production & Development E5N, Thailand Hess 9.5% Production & Development Bontang PSC, Indonesia Salamander 70% Appraisal & Exploration L15/43, Thailand APICO* 27.2% Appraisal & Exploration L27/43, Thailand APICO* 27.2% Appraisal & Exploration L13/48, Thailand APICO* 16.3% Appraisal & Exploration *APICO is the holding company for assets in Thailand, in which Salamander holds a 27.2% equity interest.
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