Salamander 2011 Salamander Energy plc (Salamander or the company) is a rapidly-growing junior oil and gas company exclusively focused on Southeast Asia. The companys strategy is to build a sustainable upstream business through leveraging its regional knowledge and relationships; maintaining a balanced portfolio of production, development, appraisal and exploration assets; enforcing strict capital allocation discipline; and pursuing targeted acquisitions in addition to organic-led growth. Since its foundation in early 2005, Salamander has developed a broad set of assets, including producing and near-production interests in Indonesia and Thailand as well as exploration and appraisal properties in Indonesia, Thailand, Vietnam, Lao PDR and the Philippines. The company reported net proved and probable reserves of 66.3 million barrels of oil equivalent (boe) and average daily production of 20,000 boe, of which about 34% is gas. 

Salamander is an existing client of IFC.  IFC supported its growth through both debt and equity investments over the last few years.  IFC has been requested to continue to support the Companys growth by providing up to $75 million debt financing in the forms of both senior and junior lending facilities. The financing will help fund the Companys planned 2011-2013 investment program that is primarily expected to cover the capital and operating expenditure needs of the following producing and near-production assets: 

-  the E5-N and EU-1 Concessions (Sinphuhorm) and the Block B8/38 Concession (Bualuang) in Thailand; and 
-  the Offshore North West Java (ONWJ), South East Sumatra (SES) Production Sharing Contracts, and the Glagah Kambuna Technical Assistance Contract in Indonesia. 

The project will include the drilling of new wells in existing fields, the selective workover of existing wells and the construction of gas processing facilities and other field infrastructure. 

The project will also include the refinancing of existing indebtedness and other general corporate uses. Salamander expects that the project will help it to increase its production to reach 30,000 boe per day by 2013. - Enhanced Availability of a Cleaner Fuel:  The Project will support the development of natural gas reserves. The increased availability of natural gas will promote the use of a cleaner fuel, given that natural gas has much lower carbon emissions than coal which is frequently the alternative fuel for power generation in Southeast Asia. 

- Preservation and Creation of Employment: The Project will have a sustaining impact on existing employment levels in producing assets and will contribute to the creation of new jobs in assets about to enter into production. Salamander staff positions are generally remunerated at a 25%-30% premium to other comparable employment. The percentage of nationals in managerial positions tends to be high, mostly above 75%. 

- Contribution to Central and Local Government Revenues: The project will increase production and generate significant fiscal receipts from a combination of royalties (8-12.5%), corporate taxes (41.5%-50.0%), production sharing (42%-73%) and obligations to supply domestic consumers at below-market prices. A material portion of these - approximately 15% of royalties in Thailand and 15-30% of total government payments in Indonesia - is expected to ultimately accrue to the regions where the oil and gas activities are undertaken. 

- Generating Additional Business for Local and National Suppliers: The project is expected to have a positive impact on national and regional economic activity through the purchasing of equipment, products and services.  For example, in 2009 contracts worth more than US$121 million were sourced from regional and national suppliers. 

- Promoting Competition and Development of Marginal Fields: The project promotes competition in the oil and gas sector through the growth of one of very few independent exploration and production companies exclusively focused on Southeast Asia. The participation of smaller privately-owned companies is important to the industry, as they often focus on reserves deemed too small to be of interest to the majors and the national oil companies which dominate the sector in Southeast Asia, and deliver production and recovery rates which tend to be above industry averages.

- Development in Frontier Regions: One of the Company's major assets, the Sinphuhorm Gas Field, is in the Northeast part of Thailand, a region that is by far the poorest and has been excluded from much of Thailand's growth.  Salamander's spending on local purchases is expected to have a positive impact on the regional economic activity, help to increase the income of the local people and promote an inclusive growth. 

Going forward, the following indicators will be tracked (i) gas production; (ii) employment; (iii) tax payments and other revenues to host governments; (iv) domestic purchase; (v) community development outlays.