Beach Petroleum Reports Solid Results

Australian oil and gas company, Beach Petroleum Limited, reported continued solid profit, revenue and production for the six months ended December 31, 2003.

First-half net profit after tax advanced by 30% to $4.4 million from $3.35 million in the previous corresponding period.

Revenue increased by 7% to $18.2 million (up from $17.1 million previously) on oil and gas production that rose 4.8% to 464,951 barrels of oil equivalent (boe) from 443,757 boe in the opening half of 2002-03.

The strong December half-year production was reflected in monthly average output of 3,205 boe per day for the six months - the highest average monthly production achieved by Beach in its 40-year history.

The unfranked interim dividend - introduced in the previous financial year - has been maintained at half-a-cent per share and will be paid on 19 March, 2004 to shareholders on the Beach share registry on March 5, 2004.

It is the fourth Beach dividend since the Company restored distributions in November 2002 and is payable on 15.4% higher ranking ordinary capital of 210 million shares compared with 182 million shares as at December 31, 2002.

Basic earnings per share climbed a further 13% to 2.08 cents per share for the December half, compared to 1.84 cents per share in the previous corresponding period.

"This is a most pleasing performance in a period which has seen further outstanding progress achieved in the continued growth of this Company," Beach Petroleum's Managing Director, Mr. Reg Nelson, said.

"As well as our exploration and development successes, and solid earnings growth, Beach has ended the latest December half-year well placed for further expansion, with cash of $36 million ($4.5 million at end of previous corresponding period)," he said.

Production gains in the latest period came from Beach's significant Christies-1 oil discovery in the Cooper Basin region of South Australia, and major extensions to the Kenmore fields in southwest Queensland, in which three new producing wells were brought on line.

Mr. Nelson said the current outlook for Beach was for a further strong second half.

"We are on track for a full year profit at least in line with last year's record $7.95 million result," he said.

"Oil and gas sales in the current half are expected to more closely reflect our record levels of production achieved towards the end of 2003".

"To some degree, the rise in the Australian dollar against the US dollar has been off set by relatively high oil prices in US dollars. Beach has also procured a sound hedging position over half of the Company's expected production output for the remainder of the financial year. However, revenue for the full 2003-2004 year will remain dependent to some extent on further changes in either currency exchange rates or the oil price."

Mr. Nelson added that he expected further production and revenue benefits to flow in the current half from development programs commenced late last year.

These programs included 3D seismic over the Christies field and optimization studies for the Sellicks field, both in South Australia, and the Kenmore-Bodalla fields in southwest Queensland.

"The new Kenmore wells in particular, have increased field contributions significantly," Mr. Nelson said.

"The extension to the field has added new reserves at low cost, and low recovery cost, and is the effective equivalent of a new field discovery in excess of one million barrels.

"Pending no major disruption, these enhancements should deliver Beach's objective of full year 2003-04 production exceeding 1 million boe - the first time such a milestone will have been achieved.

"Beach will also continue with its aggressive exploration, with at least seven exploration wells and five development wells planned for drilling between March and October this year, most of them in the Cooper/Eromanga Basin.

"We view this as a base program only for 2004 as Directors are confident the Company will drill additional wells this year as more targets are identified."

Mr. Nelson said Beach's stronger cash position followed the successful $32 million capital raising late last year via a fully underwritten Share Purchase Plan and placement to institutional investors.

"The December half year results clearly demonstrate our success at expanding our exploration and production activity within our core business strategy," he said.

"Beach has never been better placed to now complement this growth through acquisition or farm-ins to existing production assets or new exploration plays within Australia.

"The intention is to bed down at least one of these farm-ins or acquisitions within the current half, subject to the outcome of evaluations on current opportunities."