Salamander Disappointed with NW-1 Results

Salamander Energy plc provides an update on its exploration and appraisal drilling and production operations in its operated B8/38 license, offshore Gulf of Thailand.

NW-1

The B8/38-8 exploration well targeting the Northwest Terrace prospect ("NW-1") has been drilled to TD. The NW-1 well was targeting a small fault terrace structure located north of the Bualuang field. The well reached a TD of 5,879 feet (1,792 meters) true vertical depth sub-sea ("TVDSS") and a program of wire-line logging, pressure and liquid sampling undertaken. The well encountered thin oil-bearing early Miocene T2 sandstones below 5,659 feet (1,725 meters) TVDSS. Well-developed sections of both the T5 and T4 mid-Miocene sandstones were found to be water-wet. The initial conclusion is that the sand-rich section of the T5 has led to leakage across the bounding fault at this location. The well is currently being plugged and abandoned as a sub-commercial oil discovery.

NW-1 ST

With the upcoming development drilling program on Bualuang field targeting both the undrilled northern area of the field as well as the East Terrace, an appraisal side-track was undertaken from the NW-1 location. The well was drilled to 3,786 feet (1,154 meters) TVDSS and encountered the top of the main T4 sandstone oil-bearing reservoir at 3,668 feet (1,118 meters) TVDSS, some 7 feet (2 meters) high to prognosis, confirming the structural and stratigraphic model for the field.

Bualuang Bravo Platform

Load out and installation of both the Bravo jacket and topsides is now complete and the K-1 heavy lift vessel has left the field. The Bravo Platform has undergone hook up and commissioning and the Atwood Mako (400' ILC) rig will now be mobilized to the Bravo Platform for development drilling operations.

James Menzies, CEO of Salamander, commented:

"Although a relatively small target, the NW-1 exploration result was disappointing. Exploration in our offshore acreage is now focused on maturing the G4/50 prospect inventory and we eagerly anticipate the start of a minimum 6 well campaign in 2013.

"The installation and commissioning of the Bravo Platform represents a significant milestone for the Company. We look forward to a material step up in production and cash flow from the field from the development drilling program which is about to get underway. The NW-1ST appraisal has confirmed the Bualuang field model and provided an important additional data point in the north of the field ahead of the campaign.

"Elsewhere, in Indonesia, the Ocean General (mid-water semisub) rig is expected to mobilize to our operated North Kutei acreage around the end of this month in order to spud the South Kecapi exploration well, which should start drilling in the first half of December."