Beach Petroleum Sees Record Production from Cooper Basin

Beach Petroleum Limited's foray into the Cooper Eromanga Basin in Australia continues to deliver rewards with the Company reporting record quarterly and daily production levels.

In its quarterly report for the three months to December 31, 2003, Beach Petroleum announced:

  • It had $35 million in cash reserves at December 31st which could be used in part to fund new commercial acquisitions
  • December quarter production of 254,000 barrels of oil equivalent (boe) – the highest quarterly production achieved by Beach and 25% up on the 211,000 boe achieved in the preceding September 2003 quarter.
  • The record quarterly output represents an average production rate of 2,765 boe per day for the three months, with daily average production climbing further to 3,205 boepd late in December - also a record for the Company
  • A continued strong exploration and development drilling program for 2004.

  • Beach Petroleum's Managing Director, Mr. Reg Nelson, said the Company was actively evaluating a number of potential acquisitions.

    "While it is too early to comment on the nature or scope of the opportunities, the Company is in a sound financial position to now complement our strong organic growth through further acquisition," Mr. Nelson said.

    "The success of our latest capital raising has provided more than $35 million in cash reserves at December 2003.

    "As well as providing working capital for new commercial acquisitions, these reserves will also be used to accelerate Beach Petroleum's exploration and production activities and to increase our spread of exploration projects through new farm-in opportunities."

    The Company reported total sales for the latest December quarter of 180,690 boe (221,120 barrels previously) at an average of AUD$45 per barrel.

    "As production from Bodalla (southwest Queensland) has increased, so have our stock levels, from an average of 48,000 barrels per month to 104,000 barrels, due mainly to the lag of three months between production and sales," Mr. Nelson said.

    "However, we expect to reduce this lag in the second half of the financial year and see sales more closely reflecting the record levels of production, particularly during the current March quarter."

    In line with the sales volume, sales revenue for the December quarter of $8.1 million compared to $9.0 million for the previous corresponding period.

    The record production in the December quarter resulted from new output from the 100%-owned Kenmore 28, 29 and 30 appraisal wells in southwest Queensland, and the Christies-1 field (Beach 75%) in PEL 92 near Moomba in South Australia.

    Proposed 2004 Exploration Program

    Beach Petroleum also announced its initial drilling program for 2004.

    This was likely to include at least six exploration and five development wells, to be drilled between March and October this year. Further details of the program, including additional drilling, would be advised following finalization of locations and approval by Joint Venture participants, where necessary.

    Mr. Nelson said exploration opportunities for the Company in the onshore Otway Basin - where Beach has been producing gas since early in 2002 - were assuming a new importance in 2004.

    "This new focus is being driven by the recent commissioning of the region's SEA Gas pipeline into Adelaide and an expected increased demand for gas – especially alternate supplies of gas - from South Australian and Victorian markets," Mr. Nelson said.

    "Beach is now widening its search within its permits in the Basin, commencing this month with geophysical surveys on our 100%-owned PEL 136 east of Robe in South Australia."