Salamander claims success in South Sebuku drilling

Salamander Energy Plc announced today that it has completed drilling operations on the South Sebuku-1 exploration well in the Bengara I PSC, East Kalimantan.

Salamander said the South Sebuku-1 well was drilled to a total depth of 1533 meters subsea and encountered multiple gas bearing sandstones in the Tabul and Meliat formations. Drill stem tests were conducted across two of the gas-bearing zones, which flowed at an aggregate rate of 10.9 MMSCFD.

The SS-1 well has been suspended as a potential future producer and the Bengara I partners are in discussion with the authorities with a view to appraisal drilling on the South Sebuku discovery in 2010. 

The discovery is located approximately 15 km from the South Sembakung gas-condensate field in the neighbouring Simenggaris PSC, in which Salamander has a 21.6% interest. The partners are evaluating the potential for tying in South Sebuku to the South. Sembakung gas-condensate field, which received formal development approval last year. 

Heads of agreement for gas sales from South Sembakung were signed on 4 August with PT Pertamina Gas (Pertagas) and PT Medco Gas Indonesia. Under these terms approximately 20 MMscfd will be supplied over an eleven year period at a minimum 

price of $3/Mcf with an inflator indexed to methanol prices. The gas is to be sent to the nearby Bunyu Island Methanol plant, via. a pipeline that will be constructed by he consortium of buyers, and production is expected to commence in late 2011. 

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