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TRANSCRIPT
Salamander Energy
2007 Interim Results Presentation
27th September 2007
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Salamander Energy
Forward-Looking Statements
This presentation may contain forward-looking statements
and information that both represents management’s current expectations or beliefs concerning future events and are subject to known and unknown risks and uncertainties.
A number of factors could cause actual results, performance or events to differ materially from those expressed or implied
by these forward-looking statements.
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Salamander Energy
2007 Interim Results Presentation
1. Introduction & Highlights James Menzies
2. Financial Review Nick Cooper
3. Current Activity Mike Buck
4. Exploration Portfolio, Summary & Outlook James Menzies
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Salamander Energy
Salamander Energy plcPure Southeast Asian E&P
Ensign 41 Rig, Phu Horm Field, Thailand
Overview
� Main board listed on the LSE
� Market capitalisation circa $400 mm
� 2P reserves of 42.3 mmboe (YE06)
� 2007 forecast production circa 8,000 boepd
� Base plate of stable, long life production
� Broad spread of exploration & appraisal assets
� Disciplined allocation of capital across both discovered reserves and exploration
Lao PDR
Savannakhet 95% (E)
Thailand
Phu Horm 9.5% (P&D)
L15/43 27.2% (E&A)
L27/43 27.2% (E&A)
L13/48 16.3% (A)
Indonesia
ONWJ PSC 5% (P&D)
SES PSC 5% (P&D)
Vietnam
DBSCL01 100% (E)
Philippines
SC41 35% (E&A)
Indonesia
Bontang PSC 70% (E&A)
P: in production
D: under development
A: appraisal
E: exploration
Simenggaris JOB 21% (E&A)
H1 2007 Addition
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Salamander Energy
2007 Interim ResultsHeadlines
Highlights
� Maiden profit of $3.8 million (H1 2006: loss $2.2 million)
� Revenues of $32 million (H1 2006: $8.8 million)
� Operating cash flow of $14.1 million (H1 2006: $1.7 million)
� Production increased by 175% to 7,700 boepd (H1 2006: 2,800 boepd)
� Portfolio expanded with addition of four new licenses
� Phu Horm field established as a reliable producer averaging 88 MMscfd
� Strong balance sheet, period-end net cash position of $129.6 million (2006: net debt of $36.1million)
Current Activity & Outlook
� Appraising five discoveries targeting in excess of 50 MMboe of reserves
� Pre drill activity continues ahead of high impact 2008 exploration drilling programme targeting c. 500 MMboe net unrisked resources
� Increased gas sales from ONWJ and SES PSCs
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Salamander Energy
1H 2007 1H 2006 FY 2006
Production (WI) mboepd 7.7 2.8 4.4
Realised prices
- Oil $/bbl 58.95 64.80 61.33
- Gas $/mscf 3.59 2.90 3.05
Revenue $mm 32.3 8.8 31.6
EBITDA $mm 20.5 2.3 6.0
Post tax profit / (loss) $mm 3.8 (3.2) (19.6)
EPS $/share 0.04 (0.09) (0.48)
Cash $mm 154.9 54.2 152.6
Gearing % 8 60 9
Interim Financial Highlights
Production up on half year and climbing to approx. 8.0 mboepd for the full year
Higher gas realisations with Phu Horm contribution, new Indonesian GSA’s
Revenues up 260%
Maiden profit in 1H 2007
Cash position comparable to end 2006, despite new investments
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Salamander Energy
$mm 1H 2007 1H 2006 FY 2006
Revenue 32.3 8.8 31.6
Cost of sales (21.1) (6.2) (23.8)
Gross profit 11.2 2.6 7.8
Exploration expenses (3.1) (0.9) (5.3)
SG&A- General (0.7) (2.0) (2.7)- Share Based Payment (0.1) (1.4) (9.5)- IPO Fees (3.1)
Operating profit 7.3 (1.7) (12.8)
Interest revenue 3.9 1.5 2.5
Interest expense & other (1.2) (1.3) (4.2)
Pre-tax profit 10.0 (1.5) (14.5)
Tax (6.2) (1.7) (5.1)
Post-tax profit 3.8 (3.2) (19.6)
Interim Income Statement
Includes 1H 2997 amortisation of $7.21/boe
Exploration includes pre-licence expenditures. No write downs for the period
Full period contribution from producing assets driving positive operating profit
ONWJ, SES taxed at 41.5%; PH at 50%. Effective tax rate 54% post non-deductables, plus $0.9mm deferred tax charge
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Salamander Energy
$mm 1H 2007 1H 2006 FY 2006
Cash b/forward 152.6 13.1 13.1
Net operating cash flow
4.8 (2.2) 7.7
Capex- Production, development (8.7) (61.2) (90.4)- Exploration, appraisal (15.2) (4.6) (7.4)
Interest revenue 4.0 1.5 2.5
Interest expense (1.0) (0.8) (5.8)
Net proceeds from new equity issue 18.5 19.6 212.2
Net proceeds from new debt raising - 88.8 20.6
Cash c/forward 154.9 54.2 152.5
Interim Cash Flow Statement
1H 2007 operating cash flow suppressed by delayed lifting of crude in June 2007
2007 full year capexforecast raised to $75mm after Simenggaris, SC41
IPO greenshoe closed in January 2007, net of IPO fees
Cash position comparable to end 2006, despite new investments
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Salamander Energy
$mm 1H 2007 1H 2006 FY 2006
Fixed assets
- Exploration, appraisal 27.2 5.0 9.1
- Producing,development 122.3 94.8 121.9
- Other 0.7 0.3 0.3150.2 100.1 131.3
Cash 154.9 54.2 152.6
Debtors / (Creditors) 3.6 (0.5) (7.3)
Long term debt (25.7) (92.0) (25.7)
Deferred tax liability (0.9) - -
Net assets 282.1 61.8 250.9
Interim Balance Sheet
Thailand, Indonesia, Philippines
Thailand (Phu Horm), Indonesia (ONWJ, SES)
1H 2007 reflects delayed lifting of crude in June 2007
SMBC facility. Producing assets have additional debt capacity
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Salamander Energy
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2006 Average H1 '07 Average 2007 Outlook
Pro
duction R
ate
(m
boepd)
Thailand Gas & Liquids
Indonesia Gas
Indonesia Liquids
Production GrowthAverage production forecast to rise by more than 80% in 2007
� 2007 production forecast 49%
liquids
� Indonesian gas fixed price,
average $2.90/mcf in 2006
� Phu Horm gas indexed to oil,
averaging over $5/mmBtu
� Volume growth from SES &
ONWJ PSCs, new contract
>$3.60/mcf
� Phu Horm volume growth, back
filling Nam Phong field decline
� Current production rate of c. 8.0
mboepd
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Salamander Energy
Khorat Basin, Greater MekongLeading acreage position: production, development, appraisal & exploration
Block L27/43 (27.2%)
Numerous pinnacle reef structures
Dong Mun discovery
150 Bcf mean/250 Bcf upside potential
Spud appraisal wel in Oct ‘07
Block L15/43 (27.2%)
Southern extension of Phu Horm field
Phu Horm South well scheduled Dec ‘07
Phu Horm Field (9.5%)
Average production 88 mmscfd
PH-10 completed as producer
PH-6 likely to be commercial
Three producing wells see 800-900 Bcf
Block L13/48 (16.2%)
Si That discovery, Phu Horm analogue
Best estimate 1 Tcf
2D seismic Q4 ’07
Appraisal well 2008
Savannakhet PSC, Lao PDR (95%)
Two x 1 Tcf prospects
One liquids prospect c. 150 mmbo
Extensive 2D seismic
Two wells in 2008
Nam Phong Power Plant
710 MW
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Salamander Energy
Khorat PlateauOperational update, Phu Horm field
� PH-6
− Drilled underbalanced, saw gas down to TD
− Valve failure during drilling
− Acid-frac scheduled for Q1 ’08
� PH-7
− Drilled underbalanced ,did not encounter fracture network
� PH-10
− Completed as a producer, 10 MMscfd
− Drilled conventionally
� PH South
− Tree clearance finished, site construction well underway
− Spud immediately post completion of DM-3 well (Dec ’08)
SPH-ASPH-ASPH-A
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Salamander Energy
Under Balanced Drilling
Bit Change –Deployment Valve not working : well killed / damaged
Conventional Drilling (over balanced)
Khorat PlateauPhu Horm-6 Drilling Data
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Salamander Energy
1800
2500
2200
2300
1900
2000
2100
2800
3300
2600
3100
3000
2900
2700
2400
3200
1833
2018
1873
2188
2037
2555
2221
2718
2593
2715
3043
3244
TD 3295TD 3245
Huai Hin Lat Fm
Pha N
ok Khao Fm
Up Lim
estone Unit
Pha N
ok K
hao
Fm
Mid
Dolo
mite U
nit
Pha N
ok K
hao
Fm
Low
er Lim
estone U
nit
Si T
hat F
orm
atio
n
Cla
stics U
nit
Si T
hat
Form
atio
n
Lim
esto
ne U
nit
Loei G
roup
1839
1934
2032
2156DST #1
DST #2A
2193DST #3
2279
DST #2
DST #3
2527
2780
2815
3221
PH-1 PH-2SPH-A PH-5 PH-3 PH-4
TD 2462 TD 2463
TD 2178
TD 2037
GDT: 2590m (Pressure data)
2146
2203
1853
?
prognosis
2201
2442
?
Gas show/flow during drilling
DST flowed gas with no water
DST flowed gas and water
DST flowed water
GDT: 2156m(test at PH-1)
GDT: 2403m (Temp Log PH-5)
PH-10
TD 2342
1929
2070
PH-6
TD 2480
PH-7
TD 2603
193
5
1908
1988
1853
1896 1942
2037
1837
1876
24932476
South North
Khorat PlateauPhu Horm field: north - south cross section
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Salamander Energy
Khorat Basin, Greater MekongAppraising the Dong Mun discovery, L27/43 Northeast Thailand
� Scheduled spud October 2007
� Carbonate platform & reef
� DM-1 tested gas at 5+ MMscfd
� 150 Bcf mean, 250 Bcf gross upside potential, Salamander interest 27.2%
� Multiple follow up opportunities on the block
� 45 km from the Nam Phong power plant
Top Pha Nok Khau Fm
Depth Structure
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Salamander Energy
East KalimantanTutung appraisal, Bontang PSC
Ensco 1 barge-mounted rig
� 2D transition zone seismic acquired, processed & interpreted
� Tutung Alpha 1 location selected circa 1.2 km North of discovery well
� 40 – 100 Bcf potential
� Ensco-1 contracted
� Spud December 07/January 08
Near Top Reservoir
Depth Structure
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Salamander Energy
2007 Appraisal ProgramFive fields & discoveries to be appraised targeting > 50 mmboe resources
1. South Sembakung
− Tested 12.7 mmscfd
− 125 Bcf & 3 mmbc potential
2. Manik− Stratigraphic discovery
− 44 mmbo mean, 90 mmbo upside
3. Dong Mun
− 150 Bcf mean, 250 Bcf upside− 45 km from gas plant
4. Phu Horm South− Significant step out from Phu
Horm field
− Additional 180 Bcf net to Salamander in success case
− Plus unitisation upside
5. Tutung
− Gas-condensate
− 100 Bcf upside potential
Tutung Discovery
Bontang PSC (70% operated)
One well firm, plus one contingent
South Sembakung Discovery
Simengarris JOB (21%)
Two wells
Dong Mun Discovery
L27/43 (27.2%)
One well
Manik Discovery, SES PSC (5%)
Three wells
Ensign 16
Land Rig
Bohai IV
Ensco 1
Drilling Barge
Apexindo 2
Land Rig
Phu Horm South
L15/43 (27.2%)
One well
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Salamander Energy
2008 Exploration CampaignSix to eight high impact wells targeting > 10x 2P reserves
Lao PDR
Savannakhet PSC (95%, operated)
2 exploration wells 2008
3 large prospects. 1 Tcf+, 150 mmbo
Oil & gas potential
Philippines
SC41 (35%)
2 exploration wells 2008
9 leads / prospects
Oil recovered on block
50 – 150 mmboe each
Indonesia
Bontang PSC (70%, operated)
2 exploration wells 2008
10 leads / prospects
20 mmboe+ features, gas & liquids
Vietnam
DBSCL1 (100%, operated)
Exploration drilling 2008/9
Oil –prone graben
Thailand
L13/48 (16.2%, jointly operated)
Appraisal drilling 2008
Si That feature
1 Tcf mid case
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Salamander Energy
PhilippinesSC41, Sandakan Basin, East Kalimantan
� Under-explored basin offshore Borneo, favourable economic terms
� Salamander 35%, large area (4820 km2), proven petroleum system
� Completed 750 km2 3D seismic ahead of 2008 exploration drilling
� Nine leads already identified along foldbelt trend: expected size range 50 – 150 MMboe per feature
� Wildebeest-1 recovered 38.2 degree API oil from two zones
SW NE
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Salamander Energy
Cuu Long Delta River Block 1, VietnamOverlooked Cuu Long Basin analogue
1970’s Vintage Seismic, DBSCL-1 PSC
Modern Seismic, Cuu Long Basin
Basement HorstBlock
Half GrabenHalf Graben
Same vertical scale
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Salamander Energy
Forward Programme2007 appraisal drilling ahead of extensive 2008 exploration campaign
Lao PDR
Philippines
Vietnam
Tutung
SS-4
Indonesia Bontang A+ B
IndonesiaSouth Sembakung 3D
Phu Horm 3D
Savannakhet A & B
SC41 A & B
Vietnam
Phu Horm South
Dong Mun
Cuu Long Aero-Mag
DBSCL1
Si That
Savannakhet 2D
Cuu Long 2D
L13/48 2D
Bontang 3D
Exp
lora
tion
Dri
lling
Appra
isal
Dri
lling
Dev
'mnt
Dri
lling
Thailand
Indonesia
Thailand
Indonesia
Lao PDR
PH-10
2007
Dat
a Acq
uisiti
on
Thailand
Q4Q3
South Sembakung
2008
Manik
South Sembakung
Tutung
PH-6 Acid Frac
H1 07 2007 Forecast
� Exploration & appraisal capex $22.1 mm $55 mm� Production & development capex $8.3 mm $17 mm
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Salamander Energy
Profit & Cash Flow Underpinning Broad E&A PortfolioFully funded, highly active programme for 2H 2007 & 2008
� Maiden Profit
� Increasing Revenues & Cash Flow
� Expanding the Asset Portfolio
� Material Appraisal Programme
Underway
� Preparing for High Impact 2008
Exploration Programme
� Fully funded to carry out work
programme
� $3.8 MM up from $3.2 MM loss
� Revenue of $32 MM, operating cash flow 0f $14.1 MM
� Four additional license interests added during H1 07
� Financial capacity to grow the business
� Five fields and discoveries, targeting c. 53 MMboe of
resources unrisked
� 6-8 wells in Indonesia, Philippines, Vietnam, Thailand
and Lao PDR, mostly operated, high equity stakes
� 500+ mmboe of resources unrisked
� Good visibility on regional deal flow