Beach Energy Limited (ASX:BPT) Shale Oil And Gas Update

Perth, Aug 25, 2010 AEST (ABN Newswire) - Beach Energy Limited (ASX:BPT) (PINK:BEPTF) is pleased to inform shareholders that the Ensign 16 drilling rig, after a short weather related delay, has been moved to the Encounter-1 well location and is currently rigging-up. Encounter-1, which is expected to spud early to mid September, is the first of an initial two well shale gas exploration program in the Beach operated PEL 218 in South Australia. Beach holds a 90% interest in the target Permian section of this permit and is earning an up to 40% interest in the adjoining ATP 855P in Queensland. The objective shale formations of the Nappamerrri Trough have potential gas in place in excess of 200 Tcf. These volumes, combined with the existing infrastructure of the Cooper Basin and access to multiple markets, make this Beach lead project an exciting and potentially game changing opportunity. Encounter-1 will be followed by Holdfast-1.

The Encounter-1 and Holdfast-1 wells will be vertical exploratory wells targeting the shale gas production potential of the Roseneath, Epsilon and Murteree formations. Extensive coring and logging programs are planned with the aim of better defining volumes of gas in place as well as assessing the mechanical properties and likely deliverability of the formations. The shales of the Nappammerri Trough are considered to share many of the attributes of the prolific shale gas producing provinces of the USA. Fracture stimulation is one of the keys to unlocking gas from shales and it is planned to case and suspend both of these exploratory wells for future fracture stimulation at the earliest opportunity. The outcome of these wells will aid the future planning of a pilot production well expected to be drilled in 2011, followed by a pilot production project after evaluation of the results.

Beach (90%) operates the Permian section of PEL 218 on behalf of the joint venture which includes Adelaide Energy (ASX:ADE) (PINK:ADEZF) (10%).

Bakken shale oil program, Williston Basin, USA

Beach, through its wholly owned subsidiary Beach (USA) Inc, is participating in a second horizontal Bakken shale oil well in northern USA, with the rig moving to location this week. The Henderson 4-26/35H well (Beach 14.7% net revenue interest) is located in the section immediately west of the successful Henderson 4-25H well and is expected to address 600,000 barrels of recoverable oil (90,000 net to Beach). The well will have a 2.7km long horizontal section and will be stimulated with a 24 stage fracture stimulation treatment. Beach is delighted with the results from its first Bakken oil production at Henderson 4-25H well (Beach 18.5% net revenue interest) which, after a 12 stage fracture stimulation last month, is currently producing at approximately 500 bopd.

For the complete Beach Energy announcement including figures, please view the following link:

http://www.abnnewswire.net/media/en/docs/63589-ASX-BPT-179251.pdf

Contact

Reg Nelson / Neil Gibbins Beach Energy Limited Tel: +61-8-8338-2833 Investor Relations Steve Masters / Nicola Frazer Beach Energy Limited Tel: +61-8-8338-2833 http://www.beachpetroleum.com.au