Salamander Rights Issue at 130p.

Thursday, May 03 2012 by
3

My share club has some Salamander shares and we are offered a Rights issue. The question is, should we? I know they were partners in the Soco Thailand Bualuang venture and found some oil. Soco then sold out for a nice profit, and Salamander is now raising capital to develop the Thai oilfield further and also for a venture in Indonesia.

Does anyone have any further knowledge or a view on this investment|:

MD.


Filed Under: Energy,

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Salamander Energy PLC is an independent oil and gas exploration, development and production company focused on building a portfolio of assets in Southeast Asia. The Company's segments include Thailand, Indonesia and Other. Its Other segment includes Malaysia and corporate centers in the United Kingdom and Singapore. The Company's operations in Thailand are focused on the Bualuang Oil Field, offshore in the Gulf of Thailand. It also holds non-operated positions onshore in the Khorat Plateau in production, development and appraisal assets. The Greater Bualuang area comprises the B8/38 production license, which contains the Bualuang Oil Field, and the G4/50 exploration concession. Its operations in Indonesia include Kerendan field development and North Kutei. The Kerendan field contains over 120 billion cubic feet (Bcf) of proved and probable reserves (2P). The Company's other operation in onshore North East Thailand in the Khorat Plateau is the Sinphuhorm Gas Field. more »

LSE Price
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MadDutch 10th May '12 1 of 1
3

Salamander Rights issue; I think the share club should accept because;
- The sum of money involved is very small.
- The sale price of the shares is 49% less than the previous market price. 100 million new shares will be issued.
- Salamander is doing well, it recently went into profit, $112 million in 2011.
- Year end cash is $85 million. Nett debt $210 million.
- The money will be mainly used to develop its Bualuang oilfield (offshore Thailand), where it was in partnership with Soco. Salamander expects new equipment will save about $25 million per annum, and increase the life of the oilfield plus the amount of oil to be recovered. In addition, they are seeking a second rig to explore the Thai blocks B8/38 and G4/50, anticipated to be available in November / December, to drill 6 new wells. They plan to drill explo wells on the north Kutei basin Indonesia. The company thinks its prospects have 530 million barrels with a 25% chance of success, but I have seen corporate hype before and will believe it when I see it!

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