Salamander Ups Bualuang Reserves 52%, Anticipates FPSO Arrival, Hook-Up

Salamander Energy provides the following update on the Bualuang Oil Field in block B8/38 in the Gulf of Thailand.

The first phase of the field development drilling has been completed with a total of six development wells, including five producers and one water injector. These development wells encountered the oil column in better quality reservoir than prognosed, with average porosities of over 30% and an average net to gross of over 92%. The development wells also found significantly greater oil saturation than the earlier appraisal wells and a field-wide oil-water contact has been established at 1,130 meters subsea.

An initial assay of the Bualuang crude has confirmed it as 27 degree API. All of the production wells have now been completed with down-hole electrical submersible pumps and gravel packs and are awaiting hook-up to the Floating Production Storage & Offloading (FPSO) vessel.

Following the development drilling and an independent reserves audit of the Bualuang Field by RPS Energy, Salamander is up-grading its view of gross proved reserves attributable to the field from 7.2 to 11 million barrels of oil, representing a 52% increase and gross proved and probable reserves from 14.9 to 20 million barrels of oil, which represents a 34% increase.

The FPSO Rubicon Vantage is currently in port in Rayong, Thailand, undergoing mechanical completion and pre-commissioning prior to sailing to the Bualuang Field for commissioning and hook up.

"With nine wells now drilled on the Bualuang structure, we are starting to get a clear view of the resource potential of the field and are pleased with this material reserve upgrade," said James Menzies, chief executive of Salamander. "We are now looking forward to the FPSO arriving on location in order that we can tie-in the wells and start production early in the second half of the year."

Salamander holds a 60% operated interest in Block B8/38, and the remaining 40% interest is held by SOCO International. The Bualuang Field was discovered in 1993 and subsequently appraised by two further wells in 1997.