Beach Targets Substantial Lift in Net Reserves
Top 4 Australian oil and gas producer, Beach Petroleum Limited (ASX code: BPT) aims to lift its total net reserves substantially through its largest offshore exploration campaign yet.
The expanded oil and gas search will see Adelaide-based Beach participate in at least four high potential offshore wells in the next 15 months. Within that period, the Company has previously advised that it intends to drill a well in VIC/P46 (BPT 50% and operator), targeting a prospect with a potential 1200 PJ of gas offshore from Portland, Victoria.
Today, Beach advised that it has added three new high potential wells and an enhanced program that will take the Company for the first time into the waters off both Tasmania and New Zealand’s North Island.
The latter target – to be drilled within the next two months – is close to the Tui oilfield, which produced its first commercial consignments in the past week and complements Beach’s maiden foray into New Zealand’s South Island waters in late 2006.
Capital costs for the three well program are expected to be around A$50 million and will be funded from within the Company’s cashflow and reserves.
"Each of the three targets has potential to yield net oil reserves to Beach in excess of 20 million barrels of oil (mmb)," Beach’s Managing Director, Mr Reg Nelson, said today.
"These are meaningful targets in terms of Beach’s reserves position. We aim to add an additional 50% or so in total net reserves over the next three to four years through exploration discoveries and development of existing assets," Mr Nelson said.
"This estimate provides for our expectations of maintaining strong production over this period.
"This would include outputs from our underpinning Cooper Basin assets and the Basker Manta Gummy (BMG) and Tipton West coal seam gas projects as well as provision for the net impact of our A$123 million sale to ITOCHU earlier this month of a 10% stake in BMG.
"The new offshore schedule therefore represents a significant step up for Beach in its strategy to build long-term revenue drivers from both onshore and offshore oil and gas operations.
"The three projects will build on a just concluded year of greatly expanded growth in production, sales and expected profitability." Full year results will be announced to the market by Friday, August 31, 2007.
The projects, which are the subject of Beach’s farm-in arrangements announced today, include:
- Offshore New Zealand: PEP 38482 (offshore Taranaki Basin, North Island). Beach will earn a 20% interest by participating in Kopuwai-1, to be drilled in September/October 2007.
- Offshore Tasmania -1 : T/38P (Bass Basin). Beach will earn an 80% interest in a defined portion of the permit by participating in Spikey Beach-1, to be drilled in the second half of 2008.
- Offshore Tasmania -2 : T/39P (Bass Basin). Beach will earn a 50% interest by participating in Peejay-1, to be drilled in the second half of 2008.
Taranaki Basin (Fig 1)
The Taranaki Basin is New Zealand’s primary hydrocarbon province and is geologically similar to the Gippsland and Bass Basins with a Late Cretaceous to Early Tertiary hydrocarbon system.
The Kopuwai prospect lies 15km to the north of the Tui area oilfields and is interpreted to lie on the oil migration pathway from the hydrocarbon source area which charges Tui.
The well will test a well defined structural trap with more than 30 sq km of areal closure and 70m of vertical relief interpreted. Beach assesses the prospect to have the potential to contain more than 100 million barrels of recoverable oil.
Kopuwai-1, which will be operated by AWE, is scheduled to spud late in September, 2007.
Participants in Kopuwai-1 and the PEP 38482 Joint Venture are:
Company Equity PEP 38342 Beach Petroleum (NZ) Pty Ltd 20% AWE New Zealand Pty Ltd 50% Mitsui E&P Australia Pty Ltd 30%
Bass Basin (Fig 2)
The Bass Basin lies between Victoria and Tasmania, adjacent to the Gippsland Basin, with which it shares a similar geologic history and hydrocarbon system. T/38P and T/39P lie in the south-central portion of the basin in water depths of less than 100 meters.
Spikey Beach-1 and Peejay-1 will test the oil potential of two relatively simple structural traps at the top of the Eastern View Coal Measures located on the southern flank of the basin in an area which Beach expects to be primarily prospective for oil.
Beach assesses the Spikey Beach and Peejay prospects to have the potential to contain up to 33 and 57 million barrels of recoverable oil, respectively.
The wells, which will be operated by Beach, are scheduled for drilling in the second half of 2008.
Participants in the T/38P farmout block and T/39P Joint Ventures are:
Equity Company T/38P T/39P Beach Petroleum Limited 80% 50% Benaris Petroleum NV - 50% Galveston Mining Corp Pty Ltd (a wholly owned subsidiary of Cue Energy Resources Limited) 10% - Exoil Limited 10% -
(The T/38P farmin is subject to formal documentation and regulatory authority approval. The T/39P farmin is subject to Benaris board approval, formal documentation and regulatory authority approval.)
- Beach Commences Production from Middleton Gas Project (Jan 09)
- Beach Says Hello to Mr. Rod Rayner (Nov 11)
- Beach Energy Gains Majority Control of Adelaide Energy (Nov 10)