Salamander has reached agreement with respect to a farm-out arrangement with Origin Energy covering a portfolio of interests in five blocks of its operated exploration acreage in Northeast Thailand, Lao PDR and Vietnam. Origin is Australia's leading integrated energy company focused on gas and oil exploration and production, power generation and energy retailing.
On completion of the transaction, the equity interests in the five PSC's will be as listed:
Since its inception over four years ago Salamander Energy has expanded from its interest in the producing Sinphuhorm gas field to become the leading exploration acreage holder across the Khorat basin, which contains a number of large, un-appraised gas discoveries as well as frontier exploration acreage and has the potential to become significant gas producing province.
The Thai gas market is fast growing to satisfy domestic demand, with Northeast Thailand in particular estimated to require a further 1,500 MW of power capacity for local energy consumption by 2012 rising to 2,000 MW by 2015. Salamander envisages that contingent and prospective resources that can be proved up will contribute towards meeting the escalating power demand of Northeast Thailand and potentially the national Thai market. To date, Salamander has acquired over 700 km of 2D data in the L26/50 block and the Savannakhet PSC, plus over 200 km2 of multi-azimuth, high resolution 3D and an additional 112 km of 2D seismic data in the L15/50 block.
In Vietnam, Salamander holds operated acreage across the entirety of the Vinh Chau graben, offshore Southern Vietnam. The Vinh Chau graben is considered to be analogous to the neighboring prolific Cuu Long Basin. To date, Salamander has carried out an extensive work program of gravity, magnetic and seismic data acquisition, including 150 km of land and transition zone and over 3,800 km of marine 2D seismic. Salamander has built a prospect inventory across the graben-system identifying numerous oil prospects and leads, each typically with unrisked prospective oil resources in the 50 - 80 million barrel range.
An active exploration and appraisal program is planned for 2010, with drilling in four of the five blocks, targeting gross unrisked prospective resources in excess of 400 million barrels of oil equivalent. The campaign will begin in January 2010 with the Bang Nouan-1 exploration well in Lao PDR, to be followed in Q2 2010 with two exploration wells in the Vinh Chau graben area, offshore Vietnam. Appraisal drilling is also planned during 2010 on the Dao Ruang gas discovery in block L15/50, Northeast Thailand.
Salamander and Origin will continue to work together to seek and exploit additional upstream opportunities as both companies look to expand their presence across the region.
Commenting on the transaction, James Menzies, CEO of Salamander said, "Agreeing a farm-in with a high quality partner like Origin highlights the attractiveness of Salamander's exploration acreage and demonstrates the value that our exploration team has added since Salamander first acquired these licenses. Origin is a major integrated gas & power company that already has interests in Southeast Asia. It's expertise in building gas value chains will complement Salamander's exploration skills as we look to prove up and promptly commercialize the Thai and Lao gas resources in our portfolio. Furthermore, it is already present in Vietnam and, like Salamander, is committed to
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