Beach Petroleum Limited (ASX:BPT) Chairman's Address At Annual General Meeting

Adelaide, Nov 26, 2009 AEST (ABN Newswire) - Beach Petroleum Limited (ASX:BPT)(PINK:BEPTF) Chairman's address at the Annual General Meeting 2009 - I am delighted to present this report at this, the 48th Annual General Meeting of Beach Petroleum Limited.

It may be that next year's meeting will be under the name, "Beach Energy Limited", but that, of course, is subject to your approval at this meeting.

It is a change that is more in keeping with a world where clean, low carbon energy will be in great demand and highlights our strategy of balancing the Company's asset portfolio by investing in affordable low pollutant energy.

It is a more modern label that fits the Company as we continue to make what we believe are sound decisions for Beach's growth in a new world of energy opportunities.

I'm also sure that our founder, Dr Reg Sprigg, with his lifelong commitment to innovation, the natural world and sustainable and ethical business activities, would have heartily approved this move.

Of course, we will always know our Company as just plain "Beach."

I don't need to tell anyone how horrendous this last year has been as the world reeled in the global financial turmoil.

Around the world, companies - indeed, nations - suffered as markets and commodity prices dived.

Projects were scaled back and operations shrank, and companies delivered lower earnings and slashed dividend payments. Finance for projects disappeared as banks retreated from lending and began to call in debts. Capital markets all but disappeared for quite some time.

On top of this, the pressures to set targets to lower greenhouse gas emissions grew and grew.

And yet ... Beach went against this downward spiral.

All these boxes were ticked:

- Beach recorded record production of oil and gas, even as demand dropped;

- its earnings improved - by a massive 254%;

- it was able to announce a record net profit after tax of $260 million;

- its normalised NPAT rose by 21% compared with the previous year;

- its dividend payments not only nearly doubled, with the payment of a special dividend - which was fully-franked;

- it became debt free with substantial cash reserves; and

- throughout the year it continued to develop strategies to move as an energy company towards a low carbon world - strategies which we are now starting to unveil.

We believe that we have delivered growth through responsible and prudent management and by thinking ahead of the pack.

The magazine, Business Review Weekly, or BRW, put out its "Fast 100" list in October this year. This list flags the companies that, in BRW's view, have capable business people who can be successful in both good or bad times.

The total revenue of companies in this list was higher during the Global Financial Crisis year than the previous year, but the increase came from just one company in the list: Beach Petroleum.

In a later edition, BRW mused on what had affected those companies that faltered.

The editorial noted that while many struggled to remember "the big picture", those that did - who occasionally stepped back from the daily running of the business - are in a stronger position heading into the upturn.

Beach has done this. In June this year, I was delighted to announce the appointment of Mr Glenn Davis as Deputy Chairman. Mr Davis joined the Board in 2007, but he has had a long association with Beach in legal and

commercial matters, beginning with his involvement in those dark years when Beach fought fraudsters and a mountain of debt.

At the same time, I advised that our Managing Director, Mr Reg Nelson, would be concentrating on high level strategic growth opportunities for the Company and that Mr Hector Gordon would assume the role of Chief Executive Officer, with a focus on building the Company's exploration and production portfolio.

In the past few weeks, you will have seen some of what has been happening. The Cooper Basin shale gas story is emerging as one of the most exciting and innovative energy opportunities of the decade, to paraphrase one of today's leading world energy analysts, Daniel Yergin. Our objective is to develop Beach's extensive Cooper Basin gas interests and to create value through alliances with like-minded companies with an eye on a low carbon world of energy products.

I pause here to note that Reg Nelson received two honours of note this year.

The first was of particular significance to him personally and to Beach, the Company. The Reg Sprigg Gold Medal is awarded for outstanding service to the industry on an irregular basis by the Australian Petroleum Production and Exploration Association, or APPEA. APPEA is the peak petroleum industry association, representing companies that presently account for 98% of Australia's total oil and gas production - so its membership includes some of the world's major companies.

The Medal was awarded to another Reg, our own Managing Director, in Darwin in June of this year. It was an honour made doubly so, by the attendance of Doug Sprigg, Reg Sprigg's son, who flew to Darwin specially for the occasion.

In September, Reg also received further recognition when he was awarded the John Doran Memorial Award for excellence in the industry at The Good Oil Conference in Fremantle.

I have often remarked on Reg Nelson's standing in the industry and how often he is sought. Here is what APPEA's Chairman said on behalf of Reg's peers in presenting the award:

"Reg Nelson is a giant and a true gentleman of our industry. He is a sought after industry expert and a highly successful business leader who inspires everyone around him to share his passion for exploring and achieving the full potential of Australia's oil and gas industry ... His success advocating key industry issues to government owes much to his cooperative, statesman-like approach."

I also pause to pay tribute to the rest of Beach's team. At the time of Mr Gordon's appointment as CEO, I remarked that the Beach Board and executive team have forged over the years a strong rapport and mutual respect, based on independence and professional competence.

Our continued success in the Cooper Basin, with a year of yet more oil discoveries is now about to be built upon by our new success in Egypt, where the first production of oil from new fields is expected to begin in early 2010. Some people have questioned why we have chosen to become involved in Egypt. This first oil is surely proof. We are confident that we can keep finding another one or two million barrels each year in the Cooper Basin: Egypt is where we hope to find ten or twenty million barrels at a time.

And, looking ahead, in three to five years' time, we hope that our efforts in places such as Tanzania can deliver the potential for new discoveries of one to two hundred million barrels at a time.

The work done to develop this exploration strategy and to identify these opportunities has been carried out by Hector's very competent and enthusiastic team.
Everyone in Beach plays a vital role, but without prudent financial management there would be nothing. In a year of great financial turmoil and pressures I am delighted to commend to you the great work done by our Chief Financial Officer, Kathryn Presser, and her team. Their efforts in managing the Company's capital and cash flow requirements has been challenging, but they have risen to the occasion magnificently.

It's been a great pleasure to recognise the contributions made by Neil Gibbins, now General Manager - Exploration and Development, whose team has been working assiduously in all parts of the world - from the deserts of the Cooper Basin to the wilds of Africa; Gordon Moseby, now General Manager - Production and Planning, for his team's efforts in delivering a record year of production; Steve Masters, Manager - Commercial and Corporate Development, and his team for delivering value through the sale of Tipton West among other activities; Cathy Oster, Legal and Corporate Counsel and joint Company Secretary, who has helped steer the way for a proper process for corporate governance; and I must pause here in the interests of time, but just to thank everyone for such sterling efforts and commitment to Beach.

That, of course, includes the Board, who have worked unstintingly with enthusiasm and commitment throughout the year.

Let me say that this is one company where an exchange of emails in the early hours of the morning is commonplace. That really is commitment!
Having said that, I will now press on, in the interests of time.

The results for the year in review would be impressive in a normal year.

They are presented here. They speak for themselves.

It is truly a stellar performance in a year, the like of which the world has not seen since the Great Depression of the 1930s.

Nor have we neglected our other responsibilities.

We were very proud to appoint our first apprentice, Ben Dadleh, this year. Ben, who is a proud representative of the Dieri people, lives in Port Augusta in South Australia, but regularly travels to our Queensland fields via Brisbane and works in the harsh conditions of outback Australia.

Beach is committed to furthering employment opportunities, particularly for young people like Ben. It's frankly good to say we were providing fresh employment when the rest of the world was laying people off.

In this new financial year, we have undertaken to be a founding contributor to Conservation Ark.

The Royal Zoological Society of South Australia, or RZSSA has developed Conservation Ark, its integrated science and conservation arm. Its goal is to save animals from extinction by securing populations of animals, in natural ecosystems and habitats.

The RZSSA is involved in a variety of conservation activities, including direct co-ordination and management of threatened species programs to field support and captive breeding for release to the wild, as well as conservation education programs.

Beach is supporting this program by providing $100,000 for each of the next three years to:

- Fund the employment of a Conservation Officer

- Fund native conservation

- Construct a new warru (a small pen) at Monarto Zoo

Through Conservation Ark at Monarto, the Chimpanzees have shown a flair for art and today for all shareholders who have attended our AGM today, you will all go in a draw to win a painting, painted by Tzotsi - one of the Chimpanzees up at Monarto, the draw for which will be made at the conclusion of this AGM.

Beach continues to support Save the Children "Future Pathways for Young People in Ceduna" providing for the education of 25 youngsters from Ceduna's local communities including employment of a Full-time Youth Coordinator.

Beach also continues to support the Royal Flying Doctor Service and the Come-out Festival for Young people.

Beach's strategy is to fund programs that support children, the communities and the environment in which we work and the indigenous communities.

Our proposed new name "Beach Energy" reflects the company's evolving strategy. Beach will continue to be predominately an oil and gas producer but we also plan to continue investing in other, cleaner energy sources such as geothermal and biofuel.

We also plan to continue to pay a partially franked dividend annually for the foreseeable future and to continue to produce within our 8 to 10 million barrels of oil equivalent range for 2010.

We don't have any significant capped commodity hedges so your investment will benefit fully from rising energy prices.

Beach's portfolio of assets is structured to provide both long and short term returns and is diversified to allow us to follow market trends in energy supply and develop more carbon friendly energy sources.

We are continually working to educate the investment community that Beach's fundamentals are strong and our strategy is to produce consistent results.

Before I hand over to Reg Nelson, I take this opportunity to again thank all of our shareholders for their continuing loyalty and support.

Thank you, ladies and gentlemen, for your attention and I now call on our Managing Director to give his presentation on the current and future activities of the Company.

For the complete Beach Petroleum, Chairman's Address and images, please click the link below:

http://www.abnnewswire.net/media/en/docs/61822-ASX-BPT-175664.pdf

Contact

Hector Gordon Chief Operating Officer TEL: +61-8-8338-2833