Salamander Makes Indonesian Acquisition

Salamander Energy has agreed to acquire a 25% interest in the Bengara 1 PSC from PT Medco E&P Bengara (Medco). The acquisition of this interest is subject to the approval of the Government of Indonesia as required in the Bengara 1 PSC. The Bengara 1 PSC is located in the Tarakan Basin, East Kalimantan, immediately north-west of the Simenggaris JOB-PSC in which Salamander has a 21% interest.

The acquisition provides an increased presence in one of Salamander's core strategic areas, the proven but under-explored Tarakan Basin, East Kalimantan; exposure to the Sebuku prospect to be drilled 3Q 2008, located c. 8 km west and up-dip of the producing Sembakung oil & gas field; operator estimates prospective resources of 29 million barrels of oil and 14 billion cubic feet of gas for the Sebuku prospect; and follow up potential of a further six leads and prospects on the Bengara 1 block.

Commenting on the deal, James Menzies, Chief Executive of Salamander Energy stated, "I am delighted that we have expanded our presence in East Kalimantan through the acquisition of a 25 per cent interest in the Bengara 1 PSC. When combined with our interest in the neighbouring Simenggaris JOB-PSC, it provides Salamander with a secure foothold in the Tarakan, a proven and productive basin where we have a sizeable inventory of prospects and have had recent appraisal success. We look forward to adding the Sebuku well to this year’s active drilling program."