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 MAKE AN OFFER UNDER RULE 2.7 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "TAKEOVER CODE")

21 November 2014

Joint Announcement of Possible Offer for Salamander Energy plc by Ophir Energy plc

The Boards of Salamander Energy plc ("Salamander") and Ophir Energy plc ("Ophir") are pleased to jointly announce today the proposed terms of a possible share exchange offer for the entire issued and to be issued share capital of Salamander (the "Proposed Offer").

Offer Terms

Under the terms of the Proposed Offer, Salamander shareholders would be entitled to receive the following consideration:

0.5719 Ophir shares for each Salamander share.

On the basis of Ophir's share price of 202.7 pence on 24 October 2014 (being the last business day prior to the announcement by Salamander on 27 October 2014*), the terms of the Proposed Offer represent an indicative offer value of 115.9 pence for each Salamander share, which represents an indicative premium of approximately:

●      44.5 per cent. to the closing price of 80.3 pence per Salamander Share on 24 October 2014 (being the last business day prior to the date of the announcement by Salamander on 27 October 2014*); and

●      31.6 per cent. to the volume weighted average share price of 88.1 pence per Salamander Share for the 1 month period between 25 September 2014 and 24 October 2014 (being the 1 month period to the last business day prior to the date of the announcement by Salamander on 27 October 2014*).

The Proposed Offer would constitute a Class 1 transaction for Ophir for the purposes of the FCA's Listing Rules.

* Following press speculation, on 27 October 2014, the Board of Salamander issued an announcement confirming the receipt of a conditional proposal from Ophir, which commenced an offer period for Salamander under the terms of the Takeover Code.

Strategic Rationale and the Enlarged Ophir

The Boards of Ophir and Salamander believe that there would be compelling strategic logic for a combination of the two businesses that would substantially benefit the shareholders of both companies. The combined business would have a strong balance sheet, enhanced operating capability across the core operating geographies of Africa and South East Asia, and deep expertise across key technical and commercial functions.

The combined business would be well-positioned to accelerate exploration activity in Salamander's licenses in offshore Thailand, and in Ophir's recently acquired acreage in Myanmar and Indonesia, while continuing to pursue the significant opportunity set in South East Asia. The combination would provide shareholders with exposure to 21 production, development and exploration blocks in South East Asia, as well as to Ophir's extensive footprint in Africa.

Ophir, as enlarged by the combination with Salamander, would remain an exploration-led upstream company. By selectively re-investing cash flow from Salamander's current production, Ophir would be able to generate material cash flow for reinvestment in Ophir's proven business model, namely that of continued monetisation of exploration / appraisal success.

Position of the Salamander Directors

The Board of Salamander believes that the level and nature of the offer are such that it would expect to recommend the Proposed Offer, if made, subject to agreement of final aspects of the Proposed Offer which do not relate to the exchange ratio. It has been agreed that if the Board of Salamander does so recommend the Proposed Offer, each director of Salamander would provide an irrevocable undertaking to accept the offer in respect of his or her own entire beneficial holdings of Salamander shares.

Pre-Conditions to a Firm Intention Offer Announcement

Ophir has confirmed that it has completed its due diligence on Salamander.

The release of an offer announcement under Rule 2.7 of the Takeover Code by Ophir is, however, conditional on a number of pre-conditions, including:

●      the receipt of a unanimous recommendation from the Board of Salamander; and

●      the receipt of irrevocable undertakings from the Board of Salamander and from institutional shareholders in both Ophir and Salamander to support the Proposed Offer.

Ophir has reserved its right to waive, in whole or in part, these pre-conditions at any time and at its sole discretion.  Even if these pre-conditions are satisfied or waived, Ophir has no obligation to issue an announcement under Rule 2.7 of the Takeover Code.

Update on the SONA Transaction

As announced on 21 July 2014, Salamander has entered into an agreement (the "SONA SPA") 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"), pursuant to the terms of the SONA SPA. Any formal offer by Ophir would, if made, be conditional upon the SONA Transaction not proceeding.

Termination of Discussions with the CEPSA Consortium

On 17 November 2014, CEPSA and Strategic Energy (Global) Limited ("SEG") announced they no longer have an intention to make an offer for Salamander pursuant to Rule 2.8 of the Takeover Code, under which CEPSA and SEG, and any person deemed to be acting in concert with either of them, are restricted from announcing an offer or possible offer for Salamander (and / or taking any other action which could otherwise be restricted under Rule 2.8 of the Takeover Code) within the six months period commencing 17 November 2014, except in the circumstances set out in Note 2 to Rule 2.8 of the Takeover Code.

Accordingly, the Board of Salamander confirms that it is not engaged with CEPSA or SEG in relation to a possible offer for the company.

Reservations Relating to the Possible Offer

Ophir reserves the right to introduce other forms of consideration and / or vary the mix of consideration of any offer.  Ophir also reserves the right to make an offer at any time on less favourable terms:

·      with the agreement or recommendation of the Board of Salamander;

·      if and to the extent that Salamander declares, makes or pays any dividend or other return of capital to its shareholders, with a £ for £ adjustment reduction equal to the amount of such dividend or return of capital;

·      if a third party announces a firm intention to make an offer for Salamander at a lower value than Ophir's offer; or

·      following the announcement by Salamander of a whitewash transaction under the Takeover Code.

Other

There can be no certainty that any offer will be made or as to the terms of any offer.  The Board of Salamander advises its shareholders to take no action at this time, and that they will be kept informed of relevant developments as appropriate.

Ophir Analyst & Investor Call

There will be an analyst / investor call at 7.45am this morning hosted by Ophir.

Dial-in details:                      +44 (0) 1452 555566

Conference ID:                     39434220

Contacts:

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.

Publication on website     

A copy of this announcement will be made available at www.ophir-energy.com no later than 12:00 noon (London time) on 24 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.

A copy of this announcement will be made available at www.salamander-energy.com no later than 12:00 noon (London time) on 24 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.

No profit forecasts or estimates

No statement in this announcement is intended as a profit forecast or estimate for any period and no statement in this announcement should be interpreted to mean that earnings or earnings per share for Ophir or the combined group, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Ophir, as appropriate.

Forward looking statements

This announcement, including information included or incorporated by reference in this announcement, may contain certain "forward looking statements" regarding the financial position, business strategy or plans for future operations of the Ophir group and the Salamander group.  All statements other than statements of historical fact included in any document may be forward looking statements.  Forward looking statements also often use words such as "believe", "expect", "estimate", "intend", "anticipate" and words of a similar meaning.  Statements relating to reserves are deemed to be forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described can be profitably produced in the future.  By their nature, forward looking statements involve risk and uncertainty that could cause actual results to differ materially from those suggested by them.  Much of the risk and uncertainty relates to factors that are beyond the companies' abilities to control or estimate precisely, such as future market conditions and the behaviours of other market participants, and therefore undue reliance should not be placed on such statements which speak only as at the date of this announcement.  Neither the Ophir group nor any of its associates or directors, officers, employees, managers, agents, representatives, partners, members, consultants or advisers: (i) provide any representation, warranty, assurance or guarantee that the occurrence of the events expressed or implied in any forward looking statements will actually occur; nor (ii) assume any obligation to, and do not intend to, revise or update these forward looking statements, except as required pursuant to applicable law.

Sources and bases

The stated share prices of Ophir and Salamander are based on the closing middle-market price provided by the London Stock Exchange.