Salamander Energy to task full control of Thailand licence containing Bualuang oil field

Asia focused oil and gas exploration and production company Salamander Energy PLC (LON:SMDR) said its subsidiary Salamander Bualuang has reached agreement with SOCO International (LON:SIA) to purchase SOCO Thailand LLC for US$105 million.  The unit in turn owns SOCO Thailand which controls the 40 percent interest in the B8/38 licence in the Gulf of Thailand that Salamander does not already own.
The B8/38 licence is operated by Salamander and contains the Bualuang oil field. As of 31 December 2009, the estimated gross proved and probable reserves in the Bualuang oil field amounted to approximately 22.5 million barrels of oil (MMbo).

Three horizontal development wells were completed in H1 2010, and the field is forecast to produce approximately 8,500 barrels of oil per day (bopd) on average in 2010, in line with expectations.

The deal is scheduled to complete during August 2010 and will take effect on 1 January 2010. The US$105 million will be paid in cash, less a working capital adjustment for the period from the effective date to closing and certain other effective date adjustments.

In addition, a US$1 million contingent cash payment will be made upon production of a million barrels of oil from any new discovery made within the B8/38 licence area, and located five kilometres or more from the existing Bualuang oil field.

The deal increases Salamander's proforma proved and probable reserves as at 31 December 2009 by 9 MMbo to 73.8 MMboe, and increases average daily production in 2010 to over 20,000 barrels of oil equivalent per day.

Chief executive James Menzies commented: "This transaction represents a deepening of our interests in an asset we already operate and which we know well. We see scope for further exploiting the Bualuang oil field and the attractive, low risk exploration potential in the B8/38 licence.  We have recently acquired 3D seismic data over the licence and we plan to start drilling in the fourth quarter of 2010. The increased interest in B8/38 licence provides us with enhanced current production and cash flow, future growth and more material exposure to upside in the acreage."

http://www.proactiveinvestors.co.uk/companies/news/19014/salamander-energy-to-task-full-control-of-thailand-licence-containing-bualuang-oil-field-19014.html