Salamander’s production rates fall in 2011

But business improves for the UK energy company in its principal markets.

Business picks up for Salamander in south-east Asia. Credit: Getty Images

Salamander Energy’s results for the year ended 31 December 2011 reveal that the British oil and gas group has managed to slash its losses after tax to $45.46m – a substantial improvement on the previous year’s $169.52m.

The group reported revenue of $408m in 2011, an increase of 26.2 per cent compared to $323.4m in 2010. Eighty-three per cent of revenue was derived from oil.

Total exploration expenses fell to $57.8m (2010: $95.9m). During the year, the group disposed of its Offshore Northwest Java and Southeast Sumatra assets in Indonesia, booking a profit on disposal of $6.8m.

Pre-tax profit was $112.6m from continuing operations in 2011, up from a loss of $113.7m the previous year.

However, the average daily output in 2011 fell to 18,600 barrels of oil equivalents per day (boepd) – a substantial decline from 20,300 boepd in 2010.

James Menzies, chief executive of Salamander Energy, said: “2011 was an important year for high-grading the portfolio and refining our strategy. We have also materially grown our reserve base through both successful exploration and commercialising gas resources, and are now reporting record levels of revenue, cash flow and pre-tax profit. We have also taken an important step in defining the potential of our North Kutei acreage with recognition of gross prospective resources of over 670 million barrels of oil equivalent independently verified in the top four prospects.”

The energy group’s principal markets of Indonesia and Thailand continue to grow, despite the difficult global economic conditions. During 2011, the group strengthened its senior management team by creating two new positions: group technical director and exploration manager for Indonesia.

Menzies added: “We are now stepping the operational activity up a gear with two rigs running and a third secured under long-term contract. With our focus on drilling in proved basins where we have a competitive edge, the board sees great opportunities ahead and we look forward to 2012 with a keen sense of anticipation.”