Salamander Energy plc, an independent upstream oil and gas exploration and production company focussed on Asia, provides the following operational update.

Following first oil from the Salamander-operated Bualuang field, on 27 August 2008, all five production wells have now been brought on-stream successfully. The field has been producing at maximum rates of over 17,000 barrels of oil per day. Salamander’s strategy going forward is to choke back production to maintain reservoir pressure in order to maximize recoverable reserves over the life of the field.

As a result of the positive field performance to-date, and expected field production rates for the remainder of the year, Salamander is upgrading the net forecast 2008 average Group production rate from 9,000 boepd to 10,000 boepd.

Salamander has a 60% operated interest in the Bualuang field.

Having assumed operatorship of the Glagah Kambuna TAC on 29 August 2008, Salamander has completed an initial assessment of the progress of the field development plan. Following the successful drilling, completion and testing of the Kambuna development wells in the first half of the year the focus of activity has moved onshore to the receiving facilities at Pangkalan Brandan.

Access to the Pangkalan Brandan site has recently been granted and construction activity has begun. With condensate export now a critical path item to full production, options for condensate storage and export are being considered. These include an upgrade to the storage tanks at Pangkalan Brandan and barge transportation via the Babalan River to an offshore offloading facility. Initial gas is expected at the end of the first quarter of 2009 with a phased increase to full production in the third quarter.

Salamander is operator, and has a 50% working interest, in the Glagah Kambuna TAC.

Following the application for Block 31, adjacent to existing Salamander-operated acreage Cuu Long River Delta Block-01, the Company is pleased to report that the application has been approved by the Government of Vietnam. With the terms agreed and this approval in hand, Salamander anticipates signing the new PSC during the fourth quarter 2008.

Tags: Salamander Energy