Salamander soars as it strikes oil at the North Kutei basin off Indonesia

SHARES in explorer Salamander Energy soared yesterday as it said it had discovered oil at a well offshore Indonesia.

The London-listed explorer said yesterday that it had discovered 40 metres of net oil and gas in sandstones in the North Kutei basin – part of Salamander’s multi-well drilling programme – off the coast of Indonesia.

The well was drilled to a depth of more than 2,000 metres, and was flowing at 6,000 barrels of light oil and 8m cubic feet of gas per day during tests, Salamander said in an operational update.

The well, known technically as the South Kecapi-1 DIR/ST exploration well, has been plugged and abandoned as an oil and gas discovery.

Work is now underway to confirm the resources. Salamander said that the gas resources are not commercial on a standalone basis.

“We are very encouraged by these results and are now moving on to drill one of the largest structures in the basin at the North Kendang location,” chief executive James Menzies said yesterday.

Phil Corbett, analyst from Deutsche Bank, hailed the FTSE 250 explorer’s discovery yesterday, adding that it could be “transformational” for Salamander’s investment case.

Shares closed up 11.83 per cent at 208p.