Salamander Energy (LON:SMDR) has spudded the Cat Ba-1X exploration well in Block 101-100/04, offshore northern Vietnam.
The 101-CB-1X well, which will be drilled to a depth of 1,900 metres, is targeting a Palaeozoic carbonate structure with secondary objectives in the Tertiary section. Drilling is expected to take around 25 days to complete.
The Cat Ba prospect has been estimated to hold prospective recoverable resource of around 100 million barrels of oil.
Salamander says that Cat Ba is comparable to the neighbouring Ham Rong field, which was declared commercial by Petronas in 2010.
Back in May, Salamander agreed to farm out a 20 percent interest in the block to JX-Nippon Oil & Gas Exploration Corporation, reducing its stake in the project in 30 percent.
“We have reduced our financial exposure to the 101-CB-1X well through farm down, but remain highly leveraged to the upside in the event of success,” said chief executive of Salamander Energy James Menzies.
The farm out deal is subject to final government approval.
Salamander decided to shift focus to Vietnam last month after testing of the Dao Ruang-3 (DR-3) appraisal well on Block L15/50 offshore Thailand showed that the well would have limited production potential.
As a result, DR-3 was plugged and abandoned.
Shares in Salamander dropped 4 pence (1.5 percent) to trade at 273 pence in early deals in London, giving it a market cap of £421.9 million.
Notice: Salamander Energy is an independent exploration and production company that was founded in 2005 and is focused exclusively on Asia. Since inception, the company has built a portfolio of production, development and exploration assets concentrating on Indonesia, Thailand, Lao PDR and Vietnam).