Salamander Energy has revealed plans to plug and abandon the Far East Prospect in its operated B8/38 licence Gulf of Thailand.

The move comes as a barefoot drill stem test at the Far East-1 well over a zone of potential oil pay in the Ratburi carbonates, revealed formation water being present in the tested section.

The company said the rig is being prepared for release and the Bualuang North West Terrace exploration well will now be spud by the end of 2012, as part of the wider exploration program across both the B8/38 and G4/50 licence areas.

Salamander Energy chief executive officer James Menzies said, "Whilst this result is disappointing in isolation, we remain extremely excited by the exploration potential in Greater Bualuang area."

The company said it has acquired the new 3D data from the G4/50 licence where the early indications have surpassed its initial expectations on entering the licence.

It has started the tendering process to bring a rig to the area in the fourth quarter of 2012 to begin an extensive exploration program principally across the G4/50 licence.