Indonesia: Salamander Energy Announces Completion of Angklung-1 Exploration Well

Salamander Energy plc, the Asia focussed independent oil and gas exploration and production company, announces that the Angklung-1 exploration well in the Bontang PSC, East Kalimantan, Indonesia, has been completed as an oil and gas discovery. Salamander is operator of the Bontang PSC with a 100% interest.

Angklung Gas Discovery

The Angklung-1 well was drilled by the Hakuryu-5 semi submersible rig to a total depth (“TD”) of approximately 2,850 metres true vertical depth sub-sea (“TVDSS) and encountered 23 – 27 metres of net gas pay in a high quality Lower Pliocene sandstone unit at 1,850 metres TVDSS. Log evaluation indicates that the formation has porosity of up to 30% and permeability of around 50 millidarcies.

A drill stem test was conducted across a 10 metre interval of gas-bearing reservoir which flowed at a surface equipment constrained rate of approximately 24 million standard cubic feet per day. Initial analysis suggests that the gas is dry without any indication of CO2 or H2S.

Deeper Oil & Gas Potential

In the deeper section, the well encountered a gross 256 metre section of inter-bedded sandstones and shales of Upper Miocene age. Following petrophysical evaluation of a full suite of wire-line logs, this interval is interpreted to contain a net 120 metres of oil-bearing sandstones. A comprehensive sampling and pressure testing programme recovered samples of light oil and gas, though the sandstones were proved to be tight, having low permeability, and are not considered net pay at this location.

The well reached TD in a sequence of Upper Miocene carbonates with strong gas shows.

Follow On Activity

Salamander has acquired more than 650 km2 of 3D seismic in the Bontang PSC over the Angklung structure and surrounding prospects. The Angklung trend extends into the neighbouring SE Sangatta block (Salamander 75%, operator) where a 475 km2 3D seismic survey is currently being acquired.

The well has been plugged and abandoned as a discovery. The Group will now conduct further technical work to evaluate both the resource potential of the

Angklung discovery and the large inventory of prospects within Salamander’s acreage that exhibit similar seismic attributes to the pay section seen in Angklung-1 well. Work will also be undertaken to further understand the Upper Miocene oil play fairway in the area, highlighted by the Angklung-1 well.

James Menzies, Chief Executive of Salamander, commented:

“This is a highly encouraging discovery in under-explored acreage in which Salamander holds 100% interest. The Angklung-1 well has flowed gas at a commercial rate and found a new Upper Miocene oil play, highlighting the potential value in the Company’s operated position in the North Kutei basin. The discovery complements our growing portfolio of East Kalimantan gas assets and follows hot on the heels of our recent acquisition of an operated interest in the Kerendan gas field.”

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Source: salamander, November 29, 2010;