Update on Discussions with the CEPSA Consortium

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM, ANY RESTRICTED JURISDICTIONS OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

THIS ANNOUNCEMENT IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO UNDERTAKE ANY TRANSACTION UNDER RULE 2.7 OF THE CITY CODE ON TAKEOVERS AND MERGERS AND THERE CAN BE NO CERTAINTY THAT ANY TRANSACTION WILL PROCEED NOR AS TO THE TERMS OF ANY TRANSACTION

14 November 2014

Salamander Energy plc

Update on Discussions with the CEPSA Consortium

Further to the announcement by Salamander Energy plc ("Salamander" or the "Company") of 27 October 2014, the Board of Salamander notes the recent share price movement.  The Company confirms that it has received a proposed offer from a consortium led by Compañía Española de Petróleos, S.A.U. ("CEPSA") and Strategic Energy (Global) Limited (the "Jynwel Investor") (whose investment adviser is Jynwel Capital), (the "CEPSA Consortium"), for the entire issued and to be issued share capital of Salamander (the "Proposed Offer"). 

Under the Proposed Offer, if made, Salamander shareholders would be entitled to receive the following consideration:

                for each Salamander share              121 pence in cash

                                                                                  and

                                                                                 1 contingent value right, under which Salamander shareholders could receive up to 24 pence in cash*.

The contingent value rights are designed to enable Salamander shareholders to benefit from the potential success that may arise from the upcoming exploration campaign on Block G4/50 in the Gulf of Thailand. Subject to the full terms and conditions of the contingent value right being met, holders of contingent value rights would be entitled to a proportionate share in a payment of up to US$100 million in aggregate. Should the Proposed Offer be made, further details of the contingent value rights will be provided to Salamander shareholders in due course.

As announced on 21 July 2014, Salamander has entered into an agreement under which Sona Petroleum Berhard ("SONA") would acquire an effective 40% working interest in the B8/38 concession (containing the Bualuang oil field) and the surrounding G4/50 concession, both located in the Gulf of Thailand via the sale of certain shares in Salamander Energy (Bualuang) Limited (the "SONA Transaction"). The SONA Transaction is of sufficient size relative to that of Salamander to constitute a Class 1 transaction under the Listing Rules and is therefore conditional upon the approval of Salamander shareholders. Should the Proposed Offer be made, the CEPSA Consortium has indicated that it is likely to be a condition of that offer that the agreement with SONA with respect to the SONA Transaction be terminated by or with the agreement of SONA or that Salamander shareholders fail to approve the sale of shares in Salamander Energy (Bualuang) Limited.

The making of the Proposed Offer is subject to a number of conditions, including the receipt of irrevocable undertakings from the Board of Salamander and institutional shareholders, and the receipt of a unanimous recommendation from the Board of Salamander.

There can be no certainty that the Proposed Offer will be made or as to the terms of any offer. Salamander shareholders are advised to take no action at this time, and will be kept informed of relevant developments as appropriate.

This announcement has been made without the consent of the CEPSA Consortium.

* Assuming a fully diluted issued share capital of 270.9 million Salamander ordinary shares.

Contacts:

Salamander Energy

James Menzies, Chief Executive Officer

Nick Ingrassia, Corporate Development Director

+44 (0)20 7432 2680

Goldman Sachs International

Andrew Fry, Managing Director

Nimesh Khiroya, Managing Director

+44 (0)20 7774 1000

Tulchan Communications

Martin Pengelley

Stephen Malthouse

+44 (0)20 7353 4200

This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities whether pursuant to this announcement or otherwise.

The distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction.

Disclosure requirements of the Takeover Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Directors' Responsibility Statement

The Directors of Salamander accept responsibility for the information contained in this document. To the best of the knowledge and belief of the Directors, who have taken all reasonable care to ensure such is the case, the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.

Publication on Website    

A copy of this announcement will be made available at www.Salamander-energy.com no later than 12:00 noon (London time) on 17 November 2014 (being the business day following the date of this announcement) in accordance with Rule 30.4 of the Code. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

Goldman Sachs International, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting exclusively for Salamander and no one else in connection with the matters referred to in this announcement, and will not be responsible to anyone other than Salamander for providing the protections afforded to clients of Goldman Sachs International nor for providing advice in connection with the matters referred to in this announcement.

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