Salamander Energy Plc Company Intelligence Report

REFERENCE CODE GDGE0688V | PUBLICATION DATE FEBURARY 2015

SALAMANDER ENERGY PLC COMPANY INTELLIGENCE REPORT

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SALAMANDER ENERGY PLC, COMPANY INTELLIGENCE REPORT

Executive Summary

Salamander Energy, Key Valuation Metrics, 2014 Continued Focus on Thailand and Indonesia to Support Salamander’s Growth Trajectory Stock exchange LSE In XX, Salamander Energy (Salamander) Stock symbol SMDR continued its focus on exploring and developing its Current price as of February 2, 2015 (£ per share/US$ 0.7/1.1 asset base in Asia. In Thailand, the company per share) focused on the Greater Bualuang area, where it Target price (£ per share/US$ per share) 1.2/1.7 performed development drilling in order to 2013 revenue (US$ mil)/H1 2014 revenue (US$ mil) 456*/178 supplement production growth. In XX, production

Market capitalization as of February 2, 2015 (£ from the Bualuang oil field increased by XX% to 191.5/288.4 mil/US$ mil) XX thousand barrels of oil per day (mbd) when

Estimated enterprise value (£ mil/US$ mil) 745.9/1,124.5 compared with XX. This increase in production was primarily facilitated by the drilling of XX 52-week high/low (£ per share) 1.5/0.7 development wells in the area. Interpretation of the 52-week high/low (US$ per share) 2.5/1.1 data from new wells led to the addition of XX Source: GlobalData; Yahoo Finance, 2014a million barrels of oil (mmbbl) of contingent *Restated figure resource. New power and processing modules were installed on the Bravo platform, which assist in lowering the operating cost in the field. In H1 XX, Salamander Energy vs. Peer Group, Operational Performance, 2013 Salamander continued with its development drilling in the XX/XX block, where XX wells were Parameters Salamander Peer average* completed during the period. The company was also engaged in the development of Charlie Proved and probable reserves (mmboe) 64.1 211.3 platform, which is expected to assist in production Oil in total reserves (%) 49.6 43.5 growth, and in the conversion of contingent Total production (mmboe) 5.3 14.0 resources to reserves. Lifting cost, three-year (US$ per boe) 17.1 20.4 In Indonesia, Salamander focused on the Net-back, three-year (US$ per boe) 57.3 63.8 development of Kerendan field, where four development wells were drilled in XX with a test Recycle ratio, three-year 0.8 1.4 rate of XX million cubic feet per day (mmcfd). Oil and gas F&D cost per boe, three-year 174.0 46.7 Construction of the Perusahaan Listrik Negara

Reserve replacement cost (US$ per boe), (PLN) power plant was also initiated, with a 64.3 -8.3 annual capacity of XX Megawatts (MW), and planned expansion in XX. In H1 XX, the West Kerendan-1 Reserve life index 12.1 19.0 exploration well, which was drilled in Q4 XX, was Development costs (US$ mil) 192.3 535.7 completed, and was able to find more than XX meters (m) (XX feet (ft)) of gas saturation within Source: GlobalData, Oil & Gas eTrack, Advanced Company Operational and Financial Benchmarking [Accessed on December 02, 2014] the two distinct gas columns in the Upper Berai F&D: Finding and Development; mmboe: million barrels of oil equivalent Carbonates. Salamander’s certified recoverable *Peers include Enquest, JKX Oil & Gas, Premier Oil, Tullow Oil, and SOCO resources in the Kerendan area increased to over International XX billion cubic feet (bcf) with the success of the West Kerendan-1 well.

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SALAMANDER ENERGY PLC, COMPANY INTELLIGENCE REPORT

Executive Summary

In the North Kutei area in Indonesia, the North Kendang (NK)-1 and NK-2 wells were drilled in XX and H1 XX respectively. 2014 Update

In 2014, Salamander’s production reached XX mboed which is about a XX% decline compared with production volumes recorded in XX. From the capital expenditure (capex) perspective, Salamander intends to spend US$XX–XX million, of which US$XX–XX million is allocated to production and development, and US$XX–XX million to exploration and appraisal activity.

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SALAMANDER ENERGY PLC, COMPANY INTELLIGENCE REPORT

Executive Summary

Salamander Energy, Key Production Data, Salamander Energy, Key Production Data, 2010–2013 2010–2013 Parameter Unit 2010 2011 2012 2013 Crude oil and 4.7 mmbbl liquids 4.2 2.8 4.7 Natural gas bcf 12.2 13.6 6.0 3.6

Total production mmboe 7.2 6.8 3.8 5.2 Oil as percentage % of total production 69.8 64.9 73.7 88.7 Source: GlobalData, Oil & Gas eTrack, Advanced Company Operational Source: GlobalData, Oil & Gas eTrack, Advanced Company Operational and Financial and Financial Benchmarking [Accessed on December 12, 2014] Benchmarking [Accessed on December 12, 2014] bcf: billion cubic feet; mmbbl: million barrels of oil

Salamander Energy, Key Costs (US$/boe) 2010–2013

Salamander Energy, Key Cost (US$/boe), 2010–2013

Parameter Unit 2010 2011 2012 2013

F&D cost, three-year US$/boe 36.9 213. 174. 232.1 4 0 Reserve replacement US$/boe cost, three-year 23.8 13.6 19.0 25.9 Source: GlobalData, Oil & Gas eTrack, Advanced Company Operational and Financial Benchmarking [Accessed on December 12, 2014] Source: GlobalData, Oil & Gas eTrack, Advanced Company Operational and Financial Benchmarking [Accessed on December 12, 2014]

Salamander Energy, Key Valuation Metrics, Salamander Energy, Key Valuation Metrics, 2010–2013 2010–2013 Parameter Unit 2010 2011 2012 2013

EV/1P 23.2 US$/boe 14.7 - 17.3 Reserves EV/Productio US$/boe n 41,243 37,009 87,748 49,541 EV/DACF X 6.3 3.7 236.2 2.9 EV/EBITDA X 9.2 2.8 6.8 3.8

Source: GlobalData, Oil & Gas eTrack, Advanced Company Operational and Financial Source: GlobalData, Oil & Gas eTrack, Advanced Company Operational Benchmarking [Accessed on December 12, 2014] and Financial Benchmarking [Accessed on December 12, 2014] 1P: Proved; DACF: Debt-Adjusted Cash Flow, EBITDA: Earnings before Interest, Tax, Depreciation and Amortization; EV: Enterprise Value

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Table of Contents

Salamander Energy, Key Reserves and Reserves Metrics, 2010–2013 Salamander Energy, Key Reserves and Parameter Unit 2010 2011 2012 2013 Reserves Metrics, 2010–2013 Proved and probable oil mmbbl reserves 36.8 36.5 35.6 31.8 Proved and probable gas bcf reserves 186.4 221.9 216.9 193.5 Proved and probable oil mmboe and gas reserves 67.9 73.5 71.8 64.1 Oil as percentage of % total reserves 54.2 49.7 49.6 49.6 Source: GlobalData, Oil & Gas eTrack, Advanced Company Operational Source: GlobalData, Oil & Gas eTrack, Advanced Company Operational and Financial and Financial Benchmarking [Accessed on December 12, 2014] Benchmarking [Accessed on December 12, 2014] bcf: billion cubic feet

Salamander Energy, Results of Oil and Gas Operations, 2010–2013 Salamander Energy, Results of Oil and Parameter Unit 2010 2011 2012 2013 Gas Operations, 2010–2013

Oil and gas revenue 46.0 US$/boe per boe 59.0 90.2 83.6

Lifting cost per boe, US$/boe three-year 13.8 15.2 16.6 17.1

Net-back per boe, US$/boe three-year 22.6 30.8 43.8 57.3 Recycle ratio, three- % year 0.6 1.0 0.8 0.8

Source: GlobalData, Oil & Gas eTrack, Advanced Company Operational and Financial Benchmarking [Accessed on December 12, 2014] Source: GlobalData, Oil & Gas eTrack, Advanced Company Operational and Financial Benchmarking [Accessed on December 12, 2014]

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Table of Contents

Table of Contents ...... 6 1.1 List of Tables ...... 9 1.2 List of Figures ...... 11 2 Salamander Energy, Company Overview ...... 16 3 Salamander Energy, Key Highlights ...... 21 3.1 Continued Development of Thailand Assets to Drive Future Growth ...... 21 3.1.1 Greater Bualuang ...... 22 3.2 Indonesia to Supplement Growth Objectives ...... 26 3.2.1 Greater Kerendan ...... 27 3.2.2 North Kutei...... 29 4 Salamander Energy, SWOT Analysis ...... 32 4.1 Strengths ...... 32 4.1.1 Operatorship in Majority of Assets ...... 32 4.1.2 Stable Revenue Base ...... 33 4.2 Weaknesses ...... 35 4.2.1 Limited Geographical Presence ...... 35 4.2.2 High Dependence on Oil in the Production Mix ...... 35 4.2.3 Weak Bottom-Line Financial Performance ...... 35 4.3 Opportunities ...... 37 4.3.1 Substantial Exploration and Development Programs: An Opportunity to Increase Reserves and Production...... 37 4.4 Threats...... 38 4.4.1 Volatility in Commodity Prices could Adversely Affect Future Growth Plans...... 38 4.4.2 Intense Competition from Other Industry Participants ...... 38 5 Salamander Energy, Exploration, Development and Production Overview ...... 39

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Table of Contents

5.1 Production Profile ...... 41 5.2 Asset Portfolio ...... 45 5.2.1 Thailand ...... 45 5.2.2 Indonesia ...... 60 5.2.3 Malaysia ...... 66 6 Salamander Energy, Capital Expenditure ...... 67 7 Salamander Energy, Forecast Production and Financial Statements ...... 70 7.1 Income Statement (2011–2018) ...... 71 7.2 Balance Sheet (2011–2018)...... 72 7.3 Cash Flow Statement (2011–2018) ...... 74 8 Salamander Energy, Valuation ...... 75 8.1 Discounted Cash Flows ...... 75 9 Salamander Energy, Peer Comparison ...... 77 9.1 Share Price Performance ...... 77 9.2 Operational and Financial Performance ...... 79 9.3 Key Financial and Operational Ratios ...... 86 10 Salamander Energy plc, Production and Reserves Trends ...... 89 10.1 Total Oil and Gas, Reserves and Production ...... 89 10.1.1 Total Crude Oil and Natural Gas Production and Reserves Trend, 2009-2013 ...... 89 10.1.2 Total Crude Oil & Natural Gas Production and Reserves By Country/Region, 2009-2013 ...... 91 10.1.3 Total Crude Oil and Natural Gas Reserve Changes, 2009-2013 ...... 93 10.2 Crude Oil/Liquids Production and Reserve ...... 95 10.2.1 Crude Oil/Liquids Production and Reserve Trend, 2009-2013 ...... 95 10.2.2 Crude Oil Production and Reserves By Country/Region, 2009-2013 ...... 96 10.2.3 Crude Oil/Liquids Reserve Changes, 2009-2013 ...... 98 10.3 Natural Gas Production and Reserve ...... 100

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Table of Contents

10.3.1 Natural Gas Production and Reserve Trend, 2009-2013...... 100 10.3.2 Natural Gas Production and Reserves, By Country/Region, 2009-2013 ...... 101 10.3.3 Natural Gas Reserve Changes, 2009-2013 ...... 103 10.4 Total Crude Oil and Natural Gas Reserves Life Index ...... 105 10.4.1 Total Crude Oil and Natural Gas Reserves Life Index, 2009-2013 ...... 105 10.4.2 Total Crude Oil and Natural Gas Reserves Life Index, By Country/Region, 2009-2013 106 11 Salamander Energy plc, E&P Costs Trends ...... 110 11.1 Allocation of the Upstream Capital Expenditure ...... 110 11.1.1 Upstream Capital Expenditure, 2009-2013 ...... 110 11.1.2 Acquisition Costs By Country/Region, 2009-2013 ...... 112 11.1.3 Exploration and Development Costs, By Country/Region, 2009-2013...... 113 11.2 Oil and Gas Cost Per boe, US$/boe ...... 114 11.2.1 Oil and Gas Cost Per boe, US$/boe, 2009-2013 ...... 114 11.2.2 Oil and Gas Cost Per boe, US$/boe, By Country/Region, 2009-2013 ...... 116 12 Salamander Energy plc, Reserve Replacement Ratio ...... 117 12.1 Oil and Gas Production Replacement Ratio ...... 117 12.1.1 Oil and Gas Production Replacement Ratio, 2009-2013 ...... 117 12.1.2 Oil and Gas Production Replacement Ratio, By Country/Region, 2009-2013 ...... 120 13 Salamander Energy plc, Results of Oil & Gas Operations Trend ...... 127 13.1 Oil and Gas Revenue and Expenses ...... 127 13.1.1 Oil and Gas Revenue and Expenses, 2009-2013 ...... 127 13.1.2 Oil and Gas Revenue and Expenses, By Country/Region, 2009-2013 ...... 129 13.2 Oil and Gas Revenue and Expenses, Per boe ...... 132 13.2.1 Oil and Gas Revenue and Expenses, By boe, 2009-2013 ...... 132 13.2.2 Oil and Gas Revenue and Expenses Per boe, By Country/Region, 2009-2013 ...... 134 13.3 Oil and Gas Performance Metrics ...... 138

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Table of Contents

14 Appendix ...... 140 14.1 Abbreviations ...... 140 14.2 Sources...... 143 14.3 Research Methodology ...... 144 14.3.1 Coverage ...... 144 14.3.2 Secondary Research ...... 145 14.3.3 Primary Research ...... 145 14.4 Disclaimer ...... 146

1.1 List of Tables

Table 1: Salamander Energy, Total Proved and Probable Reserves, Working Interest Basis (mmboe), 2013 . 17

Table 2: Salamander Energy, Total Proved and Probable Reserves, Entitlement Interest Basis (mmboe), 2010–2013 ...... 17

Table 3: Salamander Energy, Financial and Operational Overview, 2010–2013 ...... 19

Table 4: Salamander Energy plc, Oil and Gas Production by Country, Working interest basis, (mmboe), 2010–2013 ...... 42

Table 5: Salamander Energy, Total Oil and Gas Production, 2011–2018...... 44

Table 6: Salamander Energy plc, Greater Bualuang, Key Facts, 2014 ...... 46

Table 7: Salamander Energy, G4/50, Key Statistics, 2014...... 54

Table 8: Salamander Energy, Block L27/43, Key Facts, 2014 ...... 59

Table 9: Salamander Energy, Greater Kerendan, Key Facts, 2014 ...... 61

Table 10: Salamander Energy, Capex by Activity (US$ mil), 2010– H1 2014 ...... 68

Table 11: Salamander Energy, Total Oil and Gas Production, 2011–2018 ...... 70

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Table of Contents

Table 12: GlobalData, Price Forecasts, 2014–2018 ...... 70

Table 13: Salamander Energy, Income Statement (US$ mil), 2011–2018 ...... 71

Table 14: Salamander Energy, Balance Sheet (US$ mil), 2011–2018 ...... 72

Table 15: Salamander Energy plc, Cash Flow Statement (US$ mil), 2011–2018 ...... 74

Table 16: Salamander Energy, Free Cash Flow Calculation (US$ mil), 2014–2018 ...... 75

Table 17: Salamander Energy, Discounted Cash Flow Calculation, 2014 ...... 76

Table 18: Salamander Energy and Peer Group, Operational and Financial Performance, 2013 ...... 79

Table 19: Salamander Energy and Peer Group, Total Reserves and Production (mmboe), 2013 ...... 84

Table 20: Salamander Energy plc, Peer Group Comparison, Financial and Operational Ratios, 2013 ...... 86

Table 21: Salamander Energy plc, Total Crude Oil and Natural Gas, Production and Reserves, mmboe, 2009-2013 ...... 89

Table 22: Salamander Energy plc, Total Crude Oil & Natural Gas Production and Reserves, By Country/Region, mmboe, 2009-2013 ...... 92

Table 23: Salamander Energy plc, Total Crude Oil and Natural Gas Reserve Changes, mmboe, 2009-2013 .. 93

Table 24: Salamander Energy plc, Crude Oil Production and Reserves Metrics, mmbbl, 2009-2013 ...... 95

Table 25: Salamander Energy plc, Crude Oil Production and Reserves, By Country/Region, mmbbl, 2009- 2013 ...... 97

Table 26: Salamander Energy plc, Crude Oil Reserve Changes, mmbbl, 2009-2013 ...... 98

Table 27: Salamander Energy plc, Natural Gas Production and Reserves Metrics, bcf, 2009-2013 ...... 100

Table 28: Salamander Energy plc, Natural Gas Production and Reserves, By Country/Region, bcf, 2009- 2013 ...... 102

Table 29: Salamander Energy plc, Natural Gas Reserve Changes, bcf, 2009-2013 ...... 103

Table 30: Salamander Energy plc, Oil and Gas Reserves Life Index, Years, 2009-2013...... 105

Table 31: Salamander Energy plc, Oil and Gas Reserves Life Index, By Country/Region, Years, 2009-2013 108

Table 32: Salamander Energy plc, Upstream Capital Expenditure, US$ mil, 2009-2013 ...... 110

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Table 33: Salamander Energy plc, Proved and Unproved Acquisition Costs, By Country/Region, US$ mil, 2009-2013 ...... 112

Table 34: Salamander Energy plc, Exploration and Development Costs, By Country/Region, US$ mil, 2009- 2013 ...... 113

Table 35: Salamander Energy plc, Reserves Replacement, Finding and Development Costs, Finding Cost and Proved Acquisition Costs Per boe, US$/boe, 2009-2013 ...... 114

Table 36: Salamander Energy plc, Reserves Replacement, Finding and Development Costs, Finding Cost and Proved Acquisition Costs Per boe, US$/boe, By Country/Region, 2009-2013...... 116

Table 37: Salamander Energy plc, Oil and Gas Production Replacement Ratio, %, 2009-2013 ...... 117

Table 38: Salamander Energy plc, 3-Year Wt.Avg. Oil and Gas Production Replacement Ratio, By Country/Region, %, 2009-2013 ...... 125

Table 39: Salamander Energy plc, Revenue and Expenses, US$ mil, 2009-2013 ...... 127

Table 40: Salamander Energy plc, Revenue and Expenses, By Country/Region, US$ mil, 2009-2013...... 130

Table 41: Salamander Energy plc, Oil and Gas Revenue and Expenses, US$/boe, 2009-2013 ...... 132

Table 42: Salamander Energy plc, Oil and Gas Revenue and Expenses, US$/boe, By Country/Region, 2009-2013 ...... 136

Table 43: Salamander Energy plc, Oil and Gas Performance Metrics, 2009-2013 ...... 138

1.2 List of Figures

Figure 1: Salamander Energy, Operational Map, 2014 ...... 16

Figure 2: Salamander Energy, Financial and Operational Overview, 2010–2013 ...... 18

Figure 3: Salamander Energy, Share Performance, December 2013 – November 2014 ...... 20

Figure 4: Salamander Energy, Thailand, 2014 ...... 21

Figure 5: Salamander Energy, Greater Bualuang Area, 2014 ...... 22

Figure 6: Salamander Energy, East Terrace Southern Culmination, 2014 ...... 24

Figure 7: Salamander Energy, G4/50 Exploration, Schematic Section, 2014 ...... 25

Figure 8: Salamander Energy, Indonesia, 2014...... 26

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Table of Contents

Figure 9: Salamander Energy, Greater Kerendan, 2014 ...... 27

Figure 10: Salamander Energy, Greater Kerendan, Power Line Transmission Network, 2014 ...... 28

Figure 11: Salamander Energy, North Kutei, 2014 ...... 29

Figure 12: Salamander Energy, North Kutei, 2014 ...... 30

Figure 13: Salamander Energy, Total Revenue (US$ mil), 2010–2013 ...... 34

Figure 14: Salamander Energy, Net Loss (US$ mil), 2009–2013 ...... 36

Figure 15: Salamander Energy, Operational Map, 2014 ...... 40

Figure 16: Salamander Energy, Key Milestones, 2013–2016 ...... 41

Figure 17: Salamander Energy, Total Production (mmboe), 2011–2018 ...... 43

Figure 18: Salamander Energy plc, Production Mix (%), 2011–2018 ...... 44

Figure 19: Salamander Energy, Thailand, Key Areas of Operations, 2014 ...... 45

Figure 20: Salamander Energy, Greater Bualuang Operational Map, 2014 ...... 47

Figure 21: Salamander Energy, Greater Bualuang, Key Licenses, 2014 ...... 48

Figure 22: Salamander Energy, Bualuang: Structural and Reservoir Compartmentalization, 2014 ...... 50

Figure 23: Salamander Energy, East Terrace Southern Culmination, 2014 ...... 52

Figure 24: Salamander Energy, G4/50 Exploration Status, 2014 ...... 54

Figure 25: Salamander Energy, Thailand, Khorat Plateau, 2014...... 55

Figure 26: Salamander Energy, Phu Horm Depth Structure, 2014 ...... 57

Figure 27: Salamander Energy, Dong Mun Gas Discovery, 2014 ...... 58

Figure 28: Salamander Energy, Indonesia, Key Areas of Operations, 2014 ...... 60

Figure 29: Salamander Energy, Greater Kerendan, Key Areas of Operations, 2014 ...... 62

Figure 30: Salamander Energy, North Kutei Operational Map, 2014 ...... 64

Figure 31: Salamander Energy, NK-1 and NK-2 Overview, 2014 ...... 65

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Table of Contents

Figure 32: Salamander Energy, Malaysia Operational Overview, 2014 ...... 66

Figure 33: Salamander Energy, Capex by Activity (US$ mil), 2010–H1 2014...... 68

Figure 34: Salamander Energy, Capital Expenditure by Activity and Area (%), 2014 ...... 69

Figure 35: Salamander Energy and Peer Group, Relative Share Price Performance Index (%), December 2013–November 2014 ...... 78

Figure 36: Salamander Energy and Peer Group, Financial and Operational Parameters (US$/boe), 2013 ...... 81

Figure 37: Salamander Energy and Peer Group, F&D Cost and Reserve Replacement Comparison, 2013 .... 82

Figure 38: Salamander Energy and Peer Group, Total Reserves and Production (mmboe), 2013 ...... 83

Figure 39: Salamander Energy and Peer Group, Reserve Life Index (Years), 2013 ...... 85

Figure 40: Salamander Energy and Peer Group, Valuation Ratios, 2013 ...... 88

Figure 41: Salamander Energy plc, Total Crude Oil and Natural Gas, Production and Reserves, mmboe, 2009-2013 ...... 89

Figure 42: Salamander Energy plc, Total Oil & Gas Reserves, End of Period, By Country/Region, mmboe, 2009-2013 ...... 91

Figure 43: Salamander Energy plc, Total Oil & Gas Production, By Country/Region, mmboe, 2009-2013 ...... 92

Figure 44: Salamander Energy plc, Total Crude Oil and Natural Gas Reserve Changes, mmboe, 2013 ...... 93

Figure 45: Salamander Energy plc, Crude Oil Production and Reserves Metrics, mmbbl, 2009-2013 ...... 95

Figure 46: Salamander Energy plc, Oil Reserves, End of Period, By Country/Region, mmbbl, 2009-2013 ...... 96

Figure 47: Salamander Energy plc, Oil Production, By Country/Region, mmbbl, 2009-2013 ...... 97

Figure 48: Salamander Energy plc, Crude Oil Reserve Changes, mmbbl, 2013...... 98

Figure 49: Salamander Energy plc, Natural Gas Production and Reserves Metrics, bcf, 2009-2013 ...... 100

Figure 50: Salamander Energy plc, Gas Reserves, End of Period, By Country/Region, bcf, 2009-2013 ...... 101

Figure 51: Salamander Energy plc, Gas Production, By Country/Region, bcf, 2009-2013 ...... 102

Figure 52: Salamander Energy plc, Natural Gas Reserve Changes, bcf, 2013 ...... 103

Figure 53: Salamander Energy plc, Oil and Gas Reserves Life Index, Years, 2009-2013 ...... 105

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Table of Contents

Figure 54: Salamander Energy plc, Gas Reserve Life Index, By Country/Region, Years, 2009-2013 ...... 106

Figure 55: Salamander Energy plc, Oil & Gas Reserve Life Index, By Country/Region, Years, 2009-2013.... 107

Figure 56: Salamander Energy plc, Oil Reserve Life Index, By Country/Region, Years, 2009-2013 ...... 108

Figure 57: Salamander Energy plc, Upstream Capital Expenditure, US$ mil, 2009-2013 ...... 110

Figure 58: Salamander Energy plc, 3-Year Wt.Avg., Reserves Replacement, Finding and Development Costs, Finding Cost and Proved Acquisition Costs Per boe, US$/boe, 2009-2013 ...... 114

Figure 59: Salamander Energy plc, 3-Year Wt.Avg., Oil and Gas Production Replacement Ratio, %, 2009- 2013 ...... 117

Figure 60: Salamander Energy plc, 3-Year Wt. Avg. Gas F&D Production Replacement, By Country/Region, %, 2009-2013 ...... 120

Figure 61: Salamander Energy plc, 3-Year Wt. Avg. Gas RRC Production Replacement, By Country/Region, %, 2009-2013 ...... 121

Figure 62: Salamander Energy plc, 3-Year Wt. Avg. Oil & Gas F&D Production Replacement, By Country/Region, %, 2009-2013 ...... 122

Figure 63: Salamander Energy plc, 3-Year Wt. Avg. Oil & Gas RRC Production Replacement, By Country/Region, %, 2009-2013 ...... 123

Figure 64: Salamander Energy plc, 3-Year Wt. Avg. Oil F&D Production Replacement, By Country/Region, %, 2009-2013 ...... 124

Figure 65: Salamander Energy plc, 3-Year Wt. Avg. Oil RRC Production Replacement, By Country/Region, %, 2009-2013 ...... 125

Figure 66: Salamander Energy plc, Revenue and Expenses, US$ mil, 2009-2013 ...... 127

Figure 67: Salamander Energy plc, Depreciation, Depletion and Amortization From Upstream Oil & Gas Operations, By Country/Region, US$ mil, 2009-2013 ...... 129

Figure 68: Salamander Energy plc, Oil & Gas Revenue, By Country/Region, US$ mil, 2009-2013...... 130

Figure 69: Salamander Energy plc, Oil and Gas Revenue and Expenses, US$/boe, 2009-2013 ...... 132

Figure 70: Salamander Energy plc, Oil & Gas Revenue per boe, By Country/Region, US$/boe, 2009-2013 . 134

Figure 71: Salamander Energy plc, Total DD&A per boe, By Country/Region, US$/boe, 2009-2013 ...... 135

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Table of Contents

Figure 72: Salamander Energy plc, Total Revenue per boe, By Country/Region, US$/boe, 2009-2013...... 136

Figure 73: Salamander Energy plc, Oil and Gas Performance Metrics, 2009-2013 ...... 138

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Salamander Energy plc, Company Overview

2 Salamander Energy, Company Overview

Salamander Energy (Salamander) is an upstream oil and gas company with a specific focus on exploration and production in Asia. The company was formed in 2005 and has its core assets in Thailand and Indonesia, with additional interests in Malaysia and Laos. In Thailand, Salamander has acreage positions in Greater Bualuang, which consists of the Bualuang oil field, reportedly the company’s flagship producing asset. In Indonesia, the company has interests in licenses located in the Greater Kerendan area and North Kutei. Apart from these core assets, Salamander also has interests in the Kutai Production Sharing Contract (PSC) and the south Sokang PSC, in east Kalimantan and Natuna Sea respectively. In Thailand, the company’s non-core assets comprise of its interests in blocks EU1, E5N and L15/43. In Malaysia, Salamander has interests in block PM322, while in Laos it has a stake in the Champasak and Saravan PSC.

Salamander’s headquarters are located in London, England. The following figure illustrates Salamander’s core area of operations.

Figure 1: Salamander Energy, Operational Map, 2014

Source: Salamander, 2014d

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Salamander Energy plc, Key Highlights

3 Salamander Energy, Key Highlights 3.1 Continued Development of Thailand Assets to Drive Future Growth

Salamander’s operations in Thailand form one part of the company’s core operations in Asia. In Thailand, the company has interest in the Greater Bualuang area, which is its flagship producing asset. The majority of the company’s oil production comes from its Thailand asset base. Development of this asset will enable cash-flow generation, as well as reserves and production growth in the short, medium and long term. The following figure illustrates Salamander’s operations in Thailand.

Figure 4: Salamander Energy, Thailand, 2014

Source: Salamander, 2013b

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Salamander Energy plc, Forecast Production and Financial Statements

7 Salamander Energy, Forecast Production and Financial Statements

Salamander’s production and financial projections have been made using information that is publicly available. GlobalData has used a forecast period of five years for its analysis. The table below shows Salamander’s historic and estimated production during the 2011–2018 period.

Table 11: Salamander Energy, Total Oil and Gas Production, 2011–2018 Actual Projected annual forecast Production split 2011 2012 2013 2014 2015 2016 2017 2018 Crude oil and condensate production (mmboe) 4.2 2.8 4.7 4.7 4.4 4.1 4.0 3.7 Natural gas production (bcf) 13.6 6.0 3.6 3.1 7.5 8.2 10.3 11.9 Total oil and gas production (mmboe) 6.5 3.8 5.3 5.2 5.7 5.5 5.7 5.7 Source: GlobalData

GlobalData’s price deck is divided into strong, base and weak cases to forecast a company’s performance. GlobalData has applied company-specific differentials to its projected crude oil and natural gas prices. The table below shows GlobalData’s price deck for the 2014–2018 period.

Table 12: GlobalData, Price Forecasts, 2014–2018

Crude oil price (US$ per bbl) 2014 2015 2016 2017 2018

Strong case 102.6 59.8 64.4 69.7 72.9

Base case 93.3 54.3 58.5 63.4 66.3

Weak case 84.0 48.9 52.7 57.0 59.6 Natural gas price (US$ per mcf) 2014 2015 2016 2017 2018

9.8 Strong case 6.9 7.6 8.0 8.2 Base case 8.9 6.3 6.9 7.3 7.5

Weak case 8.0 5.7 6.2 6.5 6.7 Source: GlobalData mcf: thousand cubic feet Note: GlobalData has considered base case prices for crude oil and natural gas. Brent prices are considered for crude oil and Henry Hub prices for natural gas.

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SALAMANDER ENERGY PLC, COMPANY INTELLIGENCE REPORT

Salamander Energy plc, Forecast Production and Financial Statements

7.1 Income Statement (2011–2018)

Salamander’s income statement is provided in the following table.

Table 13: Salamander Energy, Income Statement (US$ mil), 2011–2018

2011 2012 2013 2014 2015 2016 2017 2018

E&P revenue 408 373 488 463 287 297 330 332

Total revenue 408 368 482 460 287 297 330 332

Production costs 105 75 86 83 77 67 63 56 General and administrative expense 15 11 7 10 6 6 7 7 Others Expenses (+) / Income (-) (8) 67 31 9 - - - -

EBITDAX 297 215 357 358 204 224 260 269

(Gain) loss on divestitures (7) - 1 - - - - -

Exploration expense/dry hole 58 51 169 36 36 36 36 36

EBITDA 246 141 187 322 168 188 224 233

DD&A expenses 109 97 113 99 125 144 163 181

Operating income (EBIT) 137 44 74 223 43 45 61 52 Other non-operating incomes /expenses () (2) (7) (5) (2) - - - -

Net interest expenses (22) (27) (22) (27) (25) (23) (23) (23)

Earnings before tax 113 11 47 194 18 22 38 29

Total income tax 158 73 167 155 14 17 31 23

Profit after tax (45) (62) (120) 39 4 4 8 6

Other Gain (+) / Loss(-) - - (4) - - - - - Net income to common shareholders (45) (62) (124) 39 4 4 8 6

Basic shares outstanding 154 194 258 258 258 258 258 258

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SALAMANDER ENERGY PLC, COMPANY INTELLIGENCE REPORT

Salamander Energy plc, Forecast Production and Financial Statements

Diluted shares outstanding 154 194 258 258 258 258 258 258

Basic EPS (0.29) (0.32) (0.46) 0.15 0.01 0.02 0.03 0.02

Dilutive EPS (0.29) (0.32) (0.46) 0.15 0.01 0.02 0.03 0.02 Source: GlobalData; Salamander, 2013b DD&A: Depreciation, Depletion and Amortization EBITDAX: Earnings before Interest, Taxes, Depreciation, Depletion, Amortization and Exploration

7.2 Balance Sheet (2011–2018)

Salamander’s balance sheet is provided in the following table.

Table 14: Salamander Energy, Balance Sheet (US$ mil), 2011–2018

2011 2012 2013 2014 2015 2016 2017 2018 Cash and cash equivalents 60 207 245 179 95 127 189 263

Restricted cash 24 1 2 2 2 2 2 2

Accounts receivable 46 56 45 43 27 28 31 31

Inventories 60 38 44 42 39 34 32 28

Prepaid expenses 5 8 7 10 6 5 7 7

Other current assets - 18 ------

Total current assets 196 328 342 275 169 196 260 331

Receivables 25 47 48 48 48 48 48 48 Property, plant and equipment, net 523 599 663 790 779 749 701 633

Other non-current assets 228 299 313 313 313 313 313 313

Total assets 972 1,274 1,367 1,427 1,310 1,307 1,322 1,326

Accounts payable 30 43 48 46 43 37 35 31

Accrued expenses 31 76 42 58 36 34 40 40

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SALAMANDER ENERGY PLC, COMPANY INTELLIGENCE REPORT

Salamander Energy plc, Forecast Production and Financial Statements

Current portion of long- term debt 17 13 8 96 - - - -

Other current liabilities 84 71 145 145 145 145 145 145

Total current liabilities 162 204 242 346 224 216 220 216

Long-term debt 262 375 502 406 406 406 406 406

Deferred tax liability 156 150 171 186 187 188 191 193 Other non-current liabilities 13 25 48 48 48 48 48 48

Total liabilities 593 753 964 985 865 858 866 864

Common stock 30 47 47 47 47 47 47 47

Additional paid-in capital 382 564 564 564 564 564 564 564

Retained earnings (deficit) (299) (362) (482) (443) (439) (435) (427) (421)

Accumulated loss/other 267 272 273 273 273 273 273 273

Total shareholder equity 379 520 402 441 445 449 457 462 Total liabilities plus shareholders' equity 972 1,274 1,367 1,427 1,310 1,307 1,322 1,326 Source: GlobalData; Salamander, 2013b

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SALAMANDER ENERGY PLC, COMPANY INTELLIGENCE REPORT

Salamander Energy plc, Forecast Production and Financial Statements

7.3 Cash Flow Statement (2011–2018)

The following table provides Salamander’s cash-flow statement for the 2011–2018 period.

Table 15: Salamander Energy plc, Cash Flow Statement (US$ mil), 2011–2018

2011 2012 2013 2014 2015 2016 2017 2018

Profit before taxation 113 11 47 194 18 22 38 29

DD&A 109 97 114 99 125 144 163 181

Income tax paid (102) (97) (68) (141) (13) (16) (28) (21) Dry hole and impairment expense 50 68 162 36 36 36 36 36

Change in working capital 2 43 12 16 (3) (4) 2 (1)

Other operating 21 38 32 - - - - -

Operating cash flows 194 158 300 204 163 182 211 224

Capex (232) (287) (357) (263) (150) (150) (150) (150)

Asset acquisitions

Asset sales 46 - 27 - - - - -

Other investing (17) 1 (19) - - - - - Investing cash flows (203) (286) (349) (263) (150) (150) (150) (150) Additions to (reductions in) long-term debt (3) 93 (29) (8) (96) - - -

Other (17) 184 127 - - - - - Financing cash flows (19) 277 97 (8) (96) - - - Total increase/decrease of cash (29) 150 49 (66) (83) 32 61 74 Source: GlobalData; Salamander, 2013a

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Appendix

14 Appendix 14.1 Abbreviations

1P: Proven reserves

2C: Best Estimate Contingent Resource 2P: Proven and probable reserves AAGR: Average Annual Growth Rate bbl: barrels of oil bcf: billion cubic feet bd: barrels of oil per day boed: barrels of oil equivalent per day CAGR: Compound Annual Growth Rate capex: capital expenditure CFO: Cash Flow from Operations DACF: Debt-Adjusted Cash Flow DCF: Discounted Cash Flow DD&A: Depreciation, Depletion and Amortization E&D: Exploration and Development E&P: Exploration and Production EBIT: Earnings Before Interest and Taxes EBITDA: Earnings before Interest, Tax, Depreciation, Depletion and Amortization EBITDAX: Earnings before Interest, Taxes, Depreciation, Depletion, and Amortization and Exploration Expenses EIA: Environmental Impact Assessment EPS: Earnings per Share EV: Enterprise Value F&D: Finding and Development FCF: Free Cash Flow FPSO: Floating Production, Storage and Offloading ft: feet

Appendix

GSA: Gas Sales Agreement km: kilometer km2: square kilometer LTM: Last-Twelve-Month m: meters mbd: thousand barrels of oil per day mboed: thousand barrels of oil equivalent per day mcf: thousand cubic feet mi: miles mi2: square miles mil: million mmbbl: million barrels of oil mmboe: million barrels of oil equivalent mmcfd: million cubic feet per day MW: Mega Watt PLN: Perusahaan Listrik Negara PSC: Production Sharing Contract PV: Present Value Salamander: Salamander Energy WK-1: West Kerendan-1

Appendix

Conversion: £ to US$

Period Conversion

February 1, 2014 1.6

May 30, 2014 1.7 December 15, 2014 1.6 Feburary 2, 2015 1.5 Source: Oanda,2014

Appendix

Sources

 Yahoo Finance (2014a). Summary. Yahoo Finance. Available from: http://finance.yahoo.com/q?s=smdr.l [Accessed on December 4, 2014]  Yahoo Finance (2014b). Historical Prices. Yahoo Finance. http://finance.yahoo.com/q/hp?s=SMDR.L+Historical+Prices [Accessed on December 4, 2014]  Salamander (2013a). Corporate Update December-2013. Salamander. Available from: http://www.salamander-energy.com/system/files/uploads/financialdocs/Corporate-Update- Dec-2013.pdf  Salamander (2013b). Annual Report 2013. Salamander. Available from: http://www.salamander- energy.com/system/files/uploads/financialdocs/Salamander_AnnualResults2013_Presentat ion_0.pdf  Salamander (2014a). Greater Bualuang Overview. Salamander. Available from: http://www.salamander-energy.com//our-operations/greater-bualuang [Accessed on December 2, 2014]  Salamander (2014b). AGM Presentation – May 2014.Salamander. Available from: http://www.salamander- energy.com/system/files/uploads/financialdocs/Salamander_AGM2014_Presentation.pdf  Salamander (2014c). Half Yearly Presentation - 2014.Salamander. Available from: http://www.salamander- energy.com/system/files/uploads/financialdocs/half_year_results_2014_presentation.pdf  Salamander (2014d).Annual Results Presentation. Salamander. Available from: http://www.salamander- energy.com/system/files/uploads/financialdocs/half_year_results_2014_presentation.pdf  Salamander (2014e).Interim Results 2014. Salamander. Available from: http://www.salamander-energy.com/system/files/press/Interim_Results_2014.pdf  Salamander (2014f).Overview Map. Salamander. Available from: http://www.salamander- energy.com/our-operations/overview [Accessed on December 2, 2014]  Oanda (2014). Currency conversion. Oanda. Available from: http://www.oanda.com/currency/converter/ [Accessed on February 2, 2015]

Appendix

14.2 Research Methodology

GlobalData’s dedicated research and analysis teams consist of experienced professionals with advanced statistical expertise and marketing, market research and consulting backgrounds in the energy industry. GlobalData adheres to the codes of practice of the Market Research Society (www.mrs.org.uk) and Strategic and Competitive Intelligence Professionals (www.scip.org). All GlobalData databases are continuously updated and revised.

14.2.1 Coverage The objective of updating GlobalData’s coverage is to ensure that it represents the most up-to-date vision of the industry possible. Changes to the industry taxonomy are built on the basis of extensive research of company, association and competitor sources. Company coverage is based on three key factors: market capitalization; revenues; and media attention and innovation and market potential. An exhaustive search of 56 member exchanges is conducted and companies are prioritized on the basis of their market capitalization. The estimated revenues of all major companies, including private and governmental, are gathered and used to prioritize coverage. Companies that are making the news or that are of particular interest due to their innovative approach are prioritized. GlobalData aims to cover all major news events and deals in the energy industry, updated on a daily basis.

Appendix

14.2.2 Secondary Research The research process begins with extensive secondary research using internal and external sources to gather qualitative and quantitative information relating to each market. The secondary research sources that are typically referred to include, but are not limited to:  Company websites, annual reports, financial reports, broker reports, investor presentations and US Securities and Exchanges Commission (SEC) filings  Industry trade journals and other technical literature  Internal proprietary and external databases  National government documents, statistical databases and market reports  News articles, press releases and web-casts specific to the companies operating in the market

14.2.3 Primary Research GlobalData conducts hundreds of primary interviews each year with industry participants and commentators in order to validate its data and analysis. A typical research interview fulfills the following functions:  Provides first-hand information on market size, market trends, growth trends, competitive landscape and future outlook  Helps to validate and strengthen secondary research findings  Further develops the analysis team’s expertise and market understanding

Appendix

14.3 Disclaimer

All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means; electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, GlobalData.