My share club has some Salamander shares and we are offered a Rights issue. The question is, should we? I know they were partners in the Soco Thailand Bualuang venture and found some oil. Soco then sold out for a nice profit, and Salamander is now raising capital to develop the Thai oilfield further and also for a venture in Indonesia.
Does anyone have any further knowledge or a view on this investment|:
MD.
Filed Under: Energy,
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Salamander Energy PLC is a holding company. The Company is engaged in oil and gas exploration, development and production, which focuses on building a portfolio of assets in Asia. The Company operates in Thailand, Indonesia, the Philippines, Lao PDR, Vietnam and Other. The Company focuses on assets in and around three areas: Greater Bualuang, Gulf of Thailand; North Kutei, Indonesia, and Greater Kerendan, Indonesia. It operates two licenses in the Greater Bualuang area, B8/38 and G4/50. The Bualuang oil field and East Terrace has 34.2 million barrels of oil equivalent of proven and probable (2P) reserves. The Company operates the Bangkanai PSC in the Barito basin, Central Kalimantan, having 80% operated interest in this PSC. It has interest in North Kutei Basin through Bontang PSC (100%) and the Southeast Sangatta PSC (75%). more »
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Salamander Rights issue; I think the share club should accept because;
- The sum of money involved is very small.
- The sale price of the shares is 49% less than the previous market price. 100 million new shares will be issued.
- Salamander is doing well, it recently went into profit, $112 million in 2011.
- Year end cash is $85 million. Nett debt $210 million.
- The money will be mainly used to develop its Bualuang oilfield (offshore Thailand), where it was in partnership with Soco. Salamander expects new equipment will save about $25 million per annum, and increase the life of the oilfield plus the amount of oil to be recovered. In addition, they are seeking a second rig to explore the Thai blocks B8/38 and G4/50, anticipated to be available in November / December, to drill 6 new wells. They plan to drill explo wells on the north Kutei basin Indonesia. The company thinks its prospects have 530 million barrels with a 25% chance of success, but I have seen corporate hype before and will believe it when I see it!