Salamander Energy has reached agreement with respect to a farm-out arrangement with Origin Energy Ltd covering a portfolio of interests in five blocks of its operated exploration acreage in Northeast Thailand, Lao PDR and Vietnam. Origin is Australia’s leading integrated energy company focused on gas and oil exploration and production, power generation and energy retailing.

Transaction Summary Following the proposed transaction Salamander will retain a material position and operatorship of the blocks, while reducing its financial exposure to the upcoming drilling programme. Meanwhile, it will provide Origin with an exploration portfolio targeting gas supply to the fast growing energy market in Thailand as well as exposure to a high quality oil play offshore Southern Vietnam.

The highlights include: • Farm out of interests in five licences across the Greater Mekong region • Origin to fund the next US$50 million of joint exploration and appraisal expenditure across the five blocks • Origin to further fund up to an additional US$40 million of joint appraisal expenditure in the event of exploration success • Exploration & appraisal drilling to be carried out across four of the five blocks during 2010 • Salamander to have the option to acquire an equity interest in one exploration block currently operated by Origin in Southeast Asia

On completion of the transaction, Salamander's equity interests in the five PSC’s will be as listed below:

Block L26/50 (Thailand) 50% (operator) Block L15/50 (Thailand) 50% (operator) Savannakhet PSC (Lao PDR) 30% (operator) Block 31 PSC (Vietnam) 35% (operator) DBSCL-01 PSC (Vietnam) 75% (operator)

Completion of the transaction is subject to execution of agreements, partner, host government and regulatory approvals.

Tags: Salamander Energy