Beach to Focus Exploration Efforts on Cooper Basin in 2004

Beach Petroleum will outlay an estimated $13 million to drill at least 12 oil and gas exploration and development wells in calendar 2004.

The program is scheduled to commence next week with the spudding of Galilee-1.

The focus of the Company's 2004 oil and gas search will be the same areas that have driven Beach's strong oil exploration and production successes of recent years - the Cooper/ Eromanga Basins in far north South Australia and southwest Queensland.

An offshore well in northern Western Australia is also on the Beach 2004 exploration program.

"One of the wells, Goolwa-1 in PEL 107 in the South Australian section of the Cooper Basin, is primarily targeting gas," Mr. Nelson said.

"This well will be an important step for Beach in a longer term program to discover significant volumes of stratigraphically trapped gas on the western flank of the Patchawarra Trough," he said.

"The initiative is the first on-the-ground response under our strategy announced late last year to add more gas to our total production, from new gas exploration in the Cooper.

"The remainder of the 2004 exploration program is focused on adding to Beach's commercial oil volumes through drilling petroleum acreage offering rapid tie-in to nearby production facilities, from any discovery, during the current strong oil price environment."

The 2004 drilling schedule encompasses a minimum seven wildcat exploration wells with allowance for an eighth; three appraisal wells near Beach's successful Christies and Sellicks oil fields in South Australia; and two appraisal wells at its 100%-owned Kenmore and Bodalla blocks in southwest Queensland.

The Company commenced wildcat exploration drilling in the Cooper Basin in 2002 under South Australian Government initiatives to further exploit petroleum opportunities in the State's Far North.

In a flurry of Cooper Basin activity in the past two years, Beach has emerged as the most aggressive explorer and producer among the province's new independents.

"After two years of concentrated drilling, we have a better understanding of the most likely hydrocarbon trends on the flanks of the Cooper Basin," Mr. Nelson said. Major focus on PEL 92

The major activity will be centerd on PEL 92, 115 kilometers west of Moomba.

Beach plans four to five wells on the acreage in 2004 after discovering commercial oil reserves in PEL 92 with the Sellicks-1 and Christies-1 wells in the past two drilling programs.

"Our earlier exploration has clearly revealed strong potential upside in the western flank of the Basin," Mr. Nelson said.

"With two fields already in production from the PEL 92 discoveries, it is logical to focus our key oil exploration endeavors in this sector," he said.

"Beach also has a 75% interest in the tenement so any additions to existing fields in PEL 92 will be significant contributors to our total Cooper Basin production and revenues."

South Australian shortfall

Mr Nelson said South Australia's likely oil and gas shortage from 2006 provided a strong incentive to the independents to further develop the smaller but commercial opportunities continuing to present in the Cooper Basin.

"Some of this expected energy shortfall in South Australia will be able to be met by successfully targeting low risk 1-2 million barrel oil fields, with good probability for 5-10 million barrel targets or better.

"The efforts of the independents will proceed in parallel with initiatives by the main operator, Santos, to maximize its field output through efficiencies and new technologies," he said.