Beach says that the Crystal Ocean, a Floating Production, Storage and Offtake (FPSO) vessel, had been contracted for two and a half years to process oil production from the Basker and Manta fields in the Gippsland Basin in Bass Strait.
The deployment of the Crystal Ocean to the field, 150 kilometers southeast of Orbost, will be subject to the successful drilling of the Basker-2 appraisal well next May under a joint venture comprising Anzon Australia Limited (75% and Operator) and Beach Petroleum (25%).
The joint venture has already contracted the semi-submersible drill rig, the Ocean Patriot, to drill Basker-2 in May next year – an operation likely to take about a month.
While Beach is also scheduled to participate in the drilling of offshore wells in Western Australia next year, the more advanced Basker and Manta fields are potentially its first offshore revenue contributor. This is additional to its producing oil in the Cooper-Eromanga Basin.
"The signing of the Crystal Ocean is a key step forward in the schedule to complete test work on the Basker field with a view to moving immediately to first commercial production," Beach Petroleum's Managing Director, Mr Reg Nelson, said today.
"It is intended that the FPSO be used initially for an extended production test of Basker-2 as opposed to that well being restricted to short duration testing using the well's drilling rig equipment," Mr Nelson said.
"If the extended production testing proceeds as expected, then further wells will be drilled and tied into the Crystal Ocean late in 2005 and early 2006," he said.
"This will allow the development of the Basker and Manta fields to proceed in a staged manner, reducing the upfront risk and delivering Beach during 2005-2006, its first revenue streams from offshore oil production."
The Crystal Ocean is a FPSO purpose-built for extended production tests or for small field development.
Constructed in 1999 in Glasgow, the 100-meter long vessel has operated in the North Sea's Chestnut field and can be conventionally moored with a central turret. Its process facilities can handle up to 40,000 barrels of fluid per day and 50 million cubic feet per day of gas.
The joint venture has contracted the Crystal Ocean until at least 15 January 2008 with an option for a total of three extensions for an additional four years on location at the fields, in Retention Licences VIC RL 6, VIC RL 9 and VIC RL 10.
The Basker, Manta and associated Gummy (BMG) fields have Proven and Probable (2P) recoverable oil reserves of 23.3 million barrels (mmb). In addition, a contingent gas/condensate resource of 19.2 million barrels of oil equivalent (mmboe) has been identified.
If the fields are fully developed, at an estimated cost of A$200 million (for the oil only), production is expected to peak at 20,000 barrels of oil per day.
Beach Petroleum – which directly owns a 9% stake in Anzon as well as its 25% ownership of the BMG assets – expects to fund its participation in the BMG project from existing strong cash reserves and revenue from its other oil production assets.
The Company has an option to acquire a further 12.5% in the fields.
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