Salamander Energy plc, an independent upstream oil and gas exploration and production company focused on Southeast Asia, has agreed to acquire an 21% interest in the Simenggaris block located in the Tarakan Basin, East Kalimantan from Medco Simenggaris Pty. Ltd., a wholly owned subsidiary of PT Medco Energi Internasional Tbk (MedcoEnergi).

Key Points

Increased presence in core area of East Kalimantan and access to a targeted proven but under-explored basin

Addition of a low-moderate risk appraisal and exploration opportunity which complements and builds on Salamander’s current East Kalimantan deltaic positions in the Bontang PSC and SC41 concession

Appraisal drilling imminent on the South Sembakung gas-condensate discovery with a two well programme due to start in July 2007. The Apexindo-2 rig is currently being mobilised to the well location

Operator estimates South Sembakung resources to be in the region of 125 Bcf and 3 million barrels of condensate

Simenggaris block contains more than 20 identified leads and prospects

Robust local gas market, critically short of supply

The transaction is subject to approval by the Indonesian regulatory body, BPMigas.

Commenting on the deal, James Menzies, Chief Executive of Salamander Energy stated:

“We are pleased to announce the acquisition of a stake in the Simenggaris block. This is a proven, productive basin and provides Salamander with an exciting, near term appraisal opportunity. We look forward to the commencement of the drilling programme in July.”