Beach Petroleum Limited (ASX:BPT)
Adelaide, April 30, 2009 AEST (ABN Newswire) - Beach Petroleum Limited's (ASX:BPT)(PINK:BEPTF) confidence in the oil potential of the Cooper Basin has been vindicated by record production from its widespread interests in the region, particularly on the western flank.
During the quarter, Beach produced a total of 926,000 barrels of oil (up 6%) from the Cooper and its offshore Gippsland Basin fields. Together with gas and gas liquids production, this yielded total production of 2.44 million barrels of oil equivalent (boe - a combination of oil and gas production), in the March quarter.
The oil output, equivalent to an average of 10,200 barrels of oil per day, is the highest quarterly production ever achieved by Beach and was driven by a rising contribution from the Beach operated oil fields on the western flank of the Cooper Basin.
A string of six exploration successes in exploration permit, PEL 92, in the western Cooper region, has so far yielded recoverable reserves of approximately 8 million barrels with a new, six-well, exploration program due to begin in late May targeting potentially up to another 7 million barrels of recoverable reserves. Beach holds a 75% equity in PEL 92 and operates it and associated production licences.
The stronger oil production helped Beach generate March quarter sales revenue of $A129 million. Although sales revenue was down 14% compared with the previous quarter, the effects of lower oil prices have been mitigated because oil sales were made in accordance with the Tapis benchmark, which continues to trade at a premium to the commonly quoted West Texas Intermediate (WTI) price. Together with cash receipts from hedging, the average received oil price was effectively $A80 per barrel.
Beach continues to have protection from lower oil prices with 510,000 barrels of next quarter's sales hedged at a minimum of US$60 per barrel (including 150,000 barrels at a minimum of US$80 per barrel).
Shortly after the end of the quarter Beach Petroleum strengthened its financial position with the sale of its coal seam gas assets in Queensland in a deal worth of up to a total of $A400 million.
Beach Petroleum managing director, Reg Nelson, said, "The March quarter result was a very creditable performance despite the tough global financial markets and considerably lower oil prices.
"The stand-out performance of the Beach's oil discoveries on the western flank of the Cooper Basin, where we hope to continue discovering more oil reserves, is creating substantial value for Beach shareholders.
"Despite the tough financial market conditions Beach now stands in a good position to take advantage of any opportunities that might arise."
In the March quarter Beach drilled two exploration wells in PEL 92 (Beach 75%) resulting in the discovery of the Perlubie oil field 2.5 km south of the Parson oil field. The well is expected to start producing in May.
Perlubie is the sixth commercial oil discovery made in PEL 92 since 2002 where total recoverable reserves of approximately 8 million barrels have so far been discovered by Beach.
A new 6 well exploration drilling program, targeting approximately up to 7 million barrels of recoverable reserves is planned to start in late May 2009 in the region abutting the Perlubie and Parsons/Callawonga discoveries.
Mr Nelson said, "Our success rate on the western flank has always been good, but we believe that 3D seismic has improved that rate significantly.
"The targets chosen for the next round of drilling are based on the results of large regional 3D seismic surveys that we have carried out in recent times."
Coal seam gas sale
After the March quarter ended Beach announced the sale of its 40% joint venture interest in the producing Tipton West gas field and associated tenements in Queensland, to Arrow Energy Limited, under a tiered payment structure.
The sale price consists of a mix of cash, shares and contingent payments including:
- A$260 million cash - payable on completion;
- A$70 million of Arrow shares - issued on completion;
- Up to A$40 million cash on the booking of additional gross 3P gas reserves;
- A$15 million cash upon gas owned by Arrow supplying any LNG project no later than 31 December, 2016; and
- A$15 million cash upon any LNG project producing an annualised equivalent of 1 million tonnes per annum of LNG using gas supplied from Arrow's tenements no later than 31 December, 2017.
For the Beach Petroleum Limited Quarterly Report, please see the link below;
http://www.abnnewswire.net/media/en/docs/60566-ASX-BPT-171886.pdf
Contact
Reg Nelson
Beach Petroleum
Tel: +61-8-8338-2833
Ian Howarth
Farrington National
Tel: +61-407-822-319
Mark Lindh
Adelaide Equity
Tel: +61-414-551-361
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