Kiana-1 Combined Flow from Two Patchawarra Zones

Beach Petroleum has successfully perforated a second Patchawarra oil sand in Kiana-1, a recent oil discovery well in PEL 107 (PPL 212), Cooper-Eromanga Basin, South Australia. Kiana-1 is located approximately 2 kilometers to the southwest of the Muteroo Oil Field, 2 kilometers northeast of the Spencer Oil Field, and 35 kilometers west of Moomba.

The upper of two Patchawarra Formation oil sands was perforated in September 2005, soon after the well was drilled and has been flowing at an average rate of 400 barrels of oil per day at 100 psi flowing tubing pressure. After perforation of the second (lower) sand, the well is producing at a combined rate for the two sands of around 750 barrels of oil per day on a 20/64th's choke at 410 psi flowing tubing pressure. The average gas oil ratio is 38 scf/bbl.

It is anticipated that the rate will be increased to 1000 bbls per day over the coming weeks. Further plans for the installation of artificial lift are currently being progressed.

Joint Venture Participants in the Kiana -1 well are Beach Petroleum as operator with 40%; Great Artesian Oil and Gas Ltd with 30.00% and Magellan Petroleum Australia Ltd with 30.00%.