Salamander acquires Kalimantan gas block

UK oil, gas firm Salamander Energy plc announced Thursday that its subsidiary Salamander Energy Group Limited, has signed a Sale & Purchase Agreement to acquire the entire share capital of Elnusa Bangkanai Energy Ltd. (EBE) from PT Elnusa Tbk. EBE holds a 69% interest and operatorship of the Bangkanai PSC, located in the Barito Basin, onshore Central Kalimantan The Bangkanai PSC contains the Kerendan gas field.

Salamander will pay Elnusa US$11.2 million, transaction expected to close before end November 2010

EBE's sole asset is a 69% interest in and operatorship of the Bangkanai PSC, which contains the Kerendan gas field together with a number of step out exploration prospects. The field has an approved plan of development, certified proven resources of 157 Bcf and proven and probable resources of 207 Bcf.

The company said production from the Kerendan gas field is forecast to start up in 2014

Exploration prospects identified in the PSC with mean gross prospective resources in excess of 1.5 Tcf. Two exploration prospects to be drilled Q1 2011 with combined net mean resource potential of around 340 Bcf, it said.

A Plan of Development for the field has been approved by the authorities and Salamander expects to progress the development during 2011.

The Kerendan gas has less than 3% CO2 and no H2S. The gas is to be used for local power generation from which electricity will be fed into the regional transmission grid. Negotiations for gas sales to state electricity firm PLN are on-going.

Further upside lies beneath the field in the Eocene Tanjung clastics which are yet to be tested. Five prospects have been identifed in the PSC, two of which are to be drilled early in 2011. The transaction will add 100 Bcf of 1C contingent resources net to Salamander and is expected to contribute between 14 - 17 MMscfd to Group production from 2014, it said.(denny)