Salamander farms in E. Kalimantan gas block

London Stock Exchange-listed upstream independent firm Salamander Energy plc announced Wednesday it has agreed to acquire an 21% interest in the Simenggaris block located in the Tarakan Basin, East Kalimantan from Medco Simenggaris Pty. Ltd., a wholly owned subsidiary of PT Medco Energi Internasional Tbk.

The acreage comprises 1,351 square km area and is located onshore in the Tarakan Basin. Oil and gas production is well established in the Tarakan basin, with between 400 ? 500 million barrels of oil equivalent being found in the shelf area.

Appraisal drilling imminent on the South Sembakung gas-condensate discovery with a two well programme due to start in July 2007. The Apexindo-2 rig is currently being mobilised to the well location, the company said.

South Sembakung was originally discovered by Arco in 1977. The SS-1 well tested 12.7 mmscfd and 115 barrels of condensate per day from formation between 7,308 and 7,352 ft sub-sea. .

A second well (SS-2) was drilled on the structure last year which terminated in the upper Meliat formation at circa 6,950 ft sub-sea. The well saw indications of gas within the Tabul formation, but did not reach the deeper zone which tested gas in SS-1.

A third well location has been selected at the crest of the structure. The forward work programme includes a deepening of the SS-2 well to 9,000 ft into the lower Meliat formation and the drilling of new well SS-3.

Operator estimates South Sembakung resources to be in the region of 125 Bcf and 3 million barrels of condensate

Within the original license area some 20 exploration wells have been drilled resulting in seven discoveries and two commercial oil fields.

The Simenggaris PSC is operated by a Joint Operating Body (JOB) between Medco Simenggaris Pty Ltd as representative of the Contractor and PT PERTAMINA (PERSERO), Salamander Energy will become a party to the Simenggaris PSC on completion of this transaction.(alex)