South East Asian explorer Salamander Energy (SMDR) gains 3.7% to 102.9p as it confirms a commercial gas find with its West Kerendan-1 exploration well onshore Indonesia.
West Kerendan has been independently certified to contain recoverable gas in the range 133- 682 billion cubic feet (bcf) with a mid-case assessment of 313 bcf. This comes on top of the certified resource of 280 bcf in the Salamander-operated Kerendan field currently under development. Management estimate an additional 50 bcf of recoverable gas to be available from a lower gas column, which has been successfully tested.
Having completed initial tests on the well Salamander will now move to commercialise the discovery and may include it in its wider development of the Kerendan field – which is due to come on stream in the second half of this year. Investors may get more detail on how the company intends to proceed when it announces its preliminary results tomorrow (13 Mar).
Deutsche Bank, which has a 'buy' recommendation on the stock and a 175p price target, comments: 'A supportive well result with commercial volumes of gas discovered in the upper section of the well, modestly ahead of pre-drill expectations. Strong flow rates are encouraging for productivity and, following appraisal, may lead to the Kerendan development plan being extended westwards and increasing supply volumes into the local power plant.'