Salamander Energy raises US$100m and acquires interest in Vietnam oil play

Salamander Energy treated investors to a flurry of statement this morning, announcing it raised US$100m through a convertible bond and the expansion of its operation in Vietnam operations. The FTSE250 constituent also reported full year results for the year ended 31 December 2009, which revealed a 42% increase in production, a 56% increase in revenue to US$157.1m and pretax losses narroeing substantially to US$3m from US$75.5m).

The company has issued US$100m of senior, unsecured convertible bonds which are due in 2015. The Bonds are being issued at 100% of the principal, and they will have an annual coupon of 5.00%, which will be paid semi-annually in arrears. The initial conversion price is £3.637 per share, representing a 37.5% premium to the volume weighted average price on the London Stock Exchange between launch and pricing, earlier this morning.

The proceeds of the bond issue will allow the group to react promptly to opportunities to broaden and diversify its Asian portfolio. Salamander announced such an opportunity today, as it proposed its acquisition of a 50% interest in an offshore exploration block in Vietnam’s Hanoi Trough.

Through a deal with Santos Vietnam Pty and Singapore Petroleum Vietnam Song Hong Co, the company will acquire the stake in Block 101-100/04, and it will also assume the operator role for the project. In the Hanoi Trough, the Cat Ba oil prospect is scheduled to be drilled in 2011, and according to Salamander there is follow-on drilling potential with at least three further prospects identified on the block to date.

"The Hanoi Trough is a proven but underexplored basin Offshore Northern Vietnam, part of a play system that extends east to the Beibu Wan fields”, Salamander chief executive James Menzies said. “This deal introduces Salamander to a new play and broadens our prospect inventory and medium term drilling options".

Salamander Energy is an independent exploration and production company that was founded in 2005 and is focused exclusively on Asia.