14th Jan 2015 10:35
LONDON (Alliance News) - Salamander Energy PLC Wednesday said production from its assets in Thailand reached its highest ever level during 2014, just before a new gas project comes online this year and said it has officially circulated the takeover offer from Ophir Energy PLC to its shareholders.
During 2014, the company's production averaged 14,200 barrels of oil equivalent per day. The Bualuang oil and Sinphuhorm gas fields in Thailand both produced record high annual rates of production, said the company.
The Bualuang field averaged 12,500 barrels of oil per day in 2014, which is "the highest annual rate in history of the field". In the first half, production managed to reach 9,900 barrels of oil per day, with production increasing in the second half of the year to 15,100 barrels of oil per day, beating management expectations.
Salamander said the installation of a floating storage and offtake vessel in 2014 and upgrades made to infrastructure has put the company on track to extend the project's life and hit its target of reducing operating costs at the project by USD25 million per year.
The Sinphuhorm field averaged production of 1,700 barrels of oil equivalent per day, net to Salamander, during 2014.
"We are delighted to report that production has been strong in the second half of the year following the completion of the latest phase of Bualuang development," said Chief Executive James Menzies.
In August, Salamander said it had hedged 1,200 barrels of oil per day at a price of USD103.30 per barrel, which will continue throughout the whole of 2015.
The Kerendan gas processing facility, also in Thailand, is nearing completion but the company warned it is a "few weeks behind schedule". Salamander is currently renegotiating the gas sales agreement for the Kerendan gas project, which should result in "significantly more favourable terms", said the company.
At December 31, the company had net debt of USD380 million, with cash and funds of USD118 million. Salamander has committed to spend a total of USD40 million in capital expenditure during 2015.
In November, Salamander confirmed it had agreed an all-share takeover offer from Ophir, whereby Salamander shareholders would get 0.5719 Ophir share for each Salamander share they own. Following the transaction, Salamander shareholders would own around 20.9% of Ophir.
Salamander has now circulated the offer from Ophir to its shareholders.
On December 10, Ophir said it had secured 27.9% acceptances from Salamander shareholders, including one of its largest shareholders, SailingStone Capital Partners LLC.
As a result of the company recommending shareholders to accept the Ophir offer, the company has agreed to terminate a sale and purchase agreement for the SONA Petroleum Board to acquire an effective 40% working interest in its B8/38 concession, containing the Greater Bualuang area, through the sale of shares in Salamander Energy (Bualuang) Ltd.
Salamander shares up 2.5% to 61.25 pence per share on Wednesday morning whilst Ophir shares were down 0.9% to 126.40 pence per share.
By Joshua Warner; [email protected]; @JoshAlliance
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