Salamander sets drilling program for next 12 months

UK oil, gas company Salamander Plc has set drilling programs to be undertaken over the next twelve months as part of its effort to boost oil and gas production.

"The strategic realignment of our portfolio to focus on three core areas where we have material, operated positions and a detailed understanding of the geology of the basin, has made genuine progress,? James Menzies, Chief Executive Officer, said.

?We have a multiple-well drilling program planned for the next twelve months that will see drilling in the Gulf of Thailand, onshore Kalimantan and in the offshore North Kutei basin each of which offer step change value creation potential,? he said.

In 2011, the company?s average production is in line with expectations, which is at 18,000 - 19,000 boepd.

North Kutei

Salamander continued its technical analysis of the North Kutei basin including detailed work on Miocene-Pliocene slope channel play opened up by the Angklung-1 discovery well in the Bontang PSC. Salamander holds 100 percent interest in the block and act as operator.

In addition, the newly acquired and processed 3D seismic data over the SE Sangatta PSC in which Salamander holds 75 percent interest and acts as operator, is being assessed and interpreted.

?Work to date on the extensive 3D seismic dataset has highlighted numerous large prospects with the potential for a multi-TCF gas resource across the acreage, along with a significant potential oil resource. These prospects lie in water depths of approximately 300 - 500 meters and would require a deep-water drilling unit in order to test them,? it said.

Salamander has planned a multi-well drilling program to be carried out in 2H 2012. In order to minimize mobilization costs and to attract a high quality drilling unit on competitive terms, the company is working as part of a consortium that is tendering for a rig to be mobilized into Indonesia.

The tendering process is underway with a view to securing a rig by year end, it said.

Preparations are also well advanced for the drilling of the Tutung Alpha-3 appraisal well using the MB Century-28 land rig. Given the domestic demand for gas in East Kalimantan, the company believes that the Tutung Alpha-3 gas project can be commercialized using a low-cost development approach.

Salamander has prepared a Plan of Development for submission following appraisal success.

Bangkanai PSC

Following the signature in 1H 2011 of the gas sales agreement for the Kerendan field in the Bangkanai PSC, the DrillCo-1 land rig will shortly mobilize to the field location to drill development wells and exploration targets including the West Kerendan prospect. Salamander holds 69 percent interest in Bangkanai PSC and acts as operator.

It said West Kerendan has significant resource potential in a carbonate build up which is a lookalike to the Kerendan field some 10km to the East. This will also test the underlying potential of Eocene clastic reservoirs in a large four way dip closure.

Salamander has also been awarded two Joint Study Areas in the Barito basin adjacent to the Bangkanai PSC. Studies are on-going with local universities in order to review the exploration potential of the acreage.

Once studies are completed, Salamander will have a matching right on any bids the Joint Study Areas attract in future licensing rounds. (roffie)