Christies-2 Adds Weight to Potential New Oil Province

The potential for areas on the western flanks of the Cooper Basin to host a new oil fairway have strengthened after tests overnight by Beach Petroleum Limited confirmed additional oil from the primary reservoir zone in Christies-2 and lowered the field oil water contact for this reservoir by 5 meters.

The latest drill stem test, the third on Christies-2, returned a flow rate of 528 barrels of oil per day (bopd) through a 1/4-inch choke over a five meter interval between 1,636 – 1,641 meters in the Birkhead/Hutton Formation.

The result is in addition to the two new oil zone discoveries in the shallower Namur Sandstone reported from Christies-2 in the past week.

Christies-2 is located about 280 meters southwest of the 11-month old Christies-1 production well in PEL-92, 85 kilometers west of Moomba.

"The emerging multi-reservoir profile of Christies-2 adds considerable credence to our modelling that the lightly explored western flanks of the Cooper Basin offer substantial scope for profitable oil discoveries," Beach Petroleum's Managing Director, Mr. Reg Nelson, said today.

"It has long been our view that the flanks of the western and southern portions of the Cooper Basin in South Australia are as prospective as the proven areas just across the border in far southwest Queensland," Mr. Nelson said.

"The multiple stacked reservoirs at Christies reinforce that oil has migrated in considerable quantities from within the Patchawarra Trough of the Cooper Basin into the overlying Eromanga Basin along the western flank," he said.

"There is much more work to do, but we are now even more confident that this region will yield further new field discoveries with multi-stacked reservoirs.

"Subject to further evaluation, we expect the discovery of two new oil reservoirs from Christies-2 and the increase in size of the Birkhead/Hutton oil pool will increase the reserves and productivity potential of the broader Christies oil field."

Beach Petroleum is the largest and most active of the new independents exploring in the Cooper Basin.

Its Christies-1 discovery made in July last year in the Birkhead Formation and brought into production by October, is currently producing at an average rate of approximately 450 bopd.

"We expect that the Christies-2 well will be connected and producing oil within a matter of weeks," Mr. Nelson said.

"This is particularly relevant at a time of record high oil prices."

We note that 3D seismic has greatly contributed to success and that we acknowledge the cooperation of the Ngayana Dieri people in assisting us with clearances that made this seismic process possible.

Third Christies well decision

Mr. Nelson also said that the PEL 92 Joint Venture has elected to proceed with the drilling of a third well on the structure immediately following completion of Christies-2.

"This in itself is an indication of how strongly we view the potential of this field and the surrounding areas,"he said.

Participants in Christies-2, which has been drilled to its total depth of 1,864 meters, are Beach Petroleum (75% and Operator) and Cooper Energy NL (25%).