Salamander Energy, the upstream oil and gas group on the FTSE 250, has reduced its stake in the Bangkanai Production Sharing Contract (PSC) in Indonesia to 70 per cent after a series of deals saw it take on a strategic partner at the project.

The firm initially raised its stake in the Bangkanai PSC, Central Kalimantan, from 85% to 100% by acquiring the outstanding 15% interest through an asset swap with PT Medco Energi.

Salamander then farmed out a 30% holding to PT Saka Energi Indonesia for $27m cash, bringing its own operated interest down to 70%. Saka will now share in some of the development costs for exploration wells and subsequent appraisal wells.

The Bangkanai PSC contains the Kerendan gas field which is currently undergoing developmenet. Some 122.6bn cubic feet of gas (Bcf) has been committed for sale to date under a gas sales agreement with Indonesian state power company PLN. Meanwhile, a further 160 Bcf of contingent resource has been identified in the field, which is expected to come on stream in 2014.

The firm said that a number of prospects and leads have already been identified in the Bangkanai PSC and the West Kerendan prospect is due to be drilled in the second quarter of this year.

"We are very pleased to announce two transactions today that see us consolidate the remaining minority interest in the Bangkanai PSC and then welcome a strategic partner into one of our core areas," said Chief Executive Officer James Menzies.

"Although a new entrant to the upstream E&P sector, Saka bring clear expertise in the transportation and distribution of gas in the region. On the back of exploration success, they will prove to be a valuable partner in looking to tap new markets for gas. We are now looking forward to completing the Kerendan development drilling campaign and moving on to the next phase of exploration in the basin."

Shares were up 0.78% at 206p in early trading on Monday.

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