Salamander Hits Gas Offshore Indonesia

Salamander Energy plc announces that the North Kendang-1 exploration well (“NK-1”) in its operated South East Sangatta PSC, off Indonesia, has been suspended as a potential gas discovery. The rig is now being mobilised to the Bontang PSC to drill the Bedug-1 exploration well, the third well in Salamander’s multi-well programme in the North Kutei basin.

The Ocean General semi-submersible rig spudded the NK-1 well on the 10th February 2013; to date the well has been drilled to 2,535 metres true vertical depth subsea (“TVDSS”). The well drilled through a predominantly shale-prone section throughout the Pliocene. On reaching what is prognosed to be the first Upper Miocene reservoir target at 2,533 metres TVDSS, the well took a significant kick from an influx of high pressure hydrocarbon gas into the well bore at a wellhead pressure of circa 4,000 psi.

As a result of encountering high pressure gas, the well experienced operational challenges ultimately leading to its suspension before evaluating the reservoir section. The gas has been sampled and is being analysed with initial results pointing to a wet gas, while pressure data indicate a potentially significant column height.

Salamander is reviewing the option to return to NK-1 as part of the current drilling campaign, in order to drill ahead and evaluate the Upper Miocene section. NK-1 is the second well in Salamander’s multi-well programme in the North Kutei basin and follows on from the oil and gas discovery at the South Kecapi-1 well announced in February.

James Menzies, Chief Executive of Salamander, commented:

“Finding wet gas at North Kendang is highly encouraging for continued exploration in the North Kutei basin, though further drilling will be required to determine reservoir quality and a range of hydrocarbon volumes. As the well results are integrated into the geological model and technical evaluation continues, we will drill the Bedug prospect with a view to returning to North Kendang thereafter.”

 April 11, 2013

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