3i oil deal floats

The European private equity firm has made more than three times its original investment in Salamander Energy on paper, taking out just half its money in cash and sitting on its 15 percent stake.

Salamander Energy, an upstream oil and gas exploration and production company focused on south-east Asia, listed yesterday on the London Stock Exchange today at a market capitalisation of $405 million, raising $200million.

3i, Europe’s largest quoted private equity manager, invested $22.6 million for a 15% stake in September 2005. That stake is now worth $60.75 million

The private equity firm has redeemed $11.2m of preference shares in the offering while continuing to hold 100% of its equity. 

The original funding was used to build a balanced portfolio of production and exploration assets in the south-east Asia region, including producing oil and gas properties in Indonesia and Thailand, and some further development and exploration properties.

The timing of the initial public offering coincides with first gas production from one of Salamander’s assets – Phu Horm in NE Thailand.

3i’s investment in Salamander Energy is its second such investment in the region, and follows its $15m investment in Singapore-based Pearl Energy, an independent exploration and production business with a portfolio of oil and gas interests across Indonesia, Thailand and the Philippines, in August 2004. 

Pearl was listed on the Singapore Stock Exchange in 2005, and subsequently sold to Aabar Petroleum earlier this year.