As Beach Petroleum gears up to an early October start for its offshore oil and gas drilling program in the Bass and Otway Basins, its onshore Australian oil and gas activities are also about to increase markedly.
Beach Petroleum operated Cooper / Eromanga exploration Beach Petroleum Ltd.'s exploration effort in the Cooper Basin region of South Australia is being accelerated with the Company agreeing to fund the drilling of two wells in permit PEL 106 close to the SA-Queensland border. As part of a farm-in agreement with Drillsearch Energy Limited (in which Beach retains a significant shareholding), Beach will fund the Brownlow-1 and Canunda-1 wells to earn a 50% stake in the Beach Farmout Block in PEL 106.
Each well will target gas/condensate reserves in Patchawarra Formation sands, analogous to the Raven and Middleton fields. This drilling will use the Ensign 30 rig which Beach has contracted for a minimum five well Cooper Basin drilling program scheduled to start early in October. The program will include the Gunyah-1 and Perlubie-1 wells in the highly prospective PEL 92 permit (Beach 75%) where Beach has consistently made a number of significant oil discoveries since 2002, including the Sellicks, Parsons, Callawonga and Christies fields.
Gunyah-1 and Perlubie-1 are targeting oil in the Namur Sandstone, which recorded flow rates on testing of more than 3000 bbls/day of oil in the Parsons Field (on-trend and just 3 km to the north). Their proximity to Parsons means that any new discoveries can be transported to market at low incremental cost through the newly commissioned Callawonga-Tantanna flowline.
Managing Director Reg Nelson said, "The future potential of this western area continues to look very positive, in our view. We have identified up to 100 prospects and leads using older 2D seismic surveys and these have now been followed up by large regional 3D seismic surveys."
The western area of the Cooper Basin has proved to be a bonus for Beach, which holds 75% of PEL 92. The light sweet crude produced in the area is sold at a premium to the Asian market Tapis benchmark crude oil price.
Nelson continued, "It's important to realize that, despite the fall in WTI prices, Tapis prices have remained significantly higher, and have been further boosted by AUD:USD currency exchange rate movements --and on top of this, Beach receives a premium.
"For example, Tapis prices averaged AU $149.19 per barrel during July and AU $141.00 per barrel during August.
"Our finding and developing costs over the last six years in the western flank have averaged less than AU $11 per barrel and Beach has low operating costs, ensuring that oil production from this region remains very profitable," concluded Nelson.
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