Beach Energy Limited (ASX:BPT) Monthly Drilling Report Ending 1 September 2010

Perth, Sep 1, 2010 AEST (ABN Newswire) - Beach Energy Limited (ASX:BPT) (PINK:BEPTF) releases monthly drilling report ending 1 September 2010:

AUSTRALIA

Beach Operated Cooper-Eromanga Basin Gas - PEL 106FI Block

Testing operations at Canunda-1 remain suspended due to recent rainfalls affecting road access (Beach 50%, Drillsearch (ASX:DLS) (PINK:DRLLF) 50%).

Cooper Basin Gas Development - Santos (ASX:STO) Operated

Drilling operations on the Coonatie field have been affected by more rain in the basin. Operations at Coonatie-20, currently at a depth of 2779 metres in the Nappamerri Group, are expected to resume later this week. Coonatie-19 has been cased and suspended and is being followed by Coonatie-18.

Two further wells are planned for the Coonatie Field as part of the seven well development drilling campaign for the field (Beach 17.14%).

Beach Operated Cooper Basin Shale Gas Exploration - PEL 218

The commencement of drilling operations for Encounter-1 (Beach 90%), the first of a two well, back-to-back exploration program targeting shale gas potential in the South Australian portion of the Nappamerri Trough, is scheduled for mid September. Some 95 percent of the Ensign 16 rig has been moved onto the drillsite and is partially riggedup. The objective shale formations of the Nappamerrri Trough have potential gas-inplace in excess of 200 Tcf.

Beach Operated Geothermal - Paralana Project, Arrowie Basin

Operations to perform an injectivity test on the Paralana-2 geothermal well commenced over the last week. The test is being undertaken to assist in assessing optimal parameters for a fracture stimulation of the well.

Progress has been delayed due to the perforating assembly being unable to pass an obstruction at approximately 3200m. The obstruction will be removed by use of a coiled tubing unit at the earliest opportunity. Following this operation, the program will recommence as initially planned. The short delay will have no impact on the planned fracture stimulation of the well, scheduled for the fourth quarter (Beach 21%).

INTERNATIONAL

Unconventional

Non-operated Shale Oil

Appraisal, South Antelope Prospect, Williston Basin - North Dakota, USA

The Henderson 4-26/35H shale oil appraisal well (Beach 14.7% net revenue interest) is expected to spud before the end of this week. The well, targeting 600,000 barrels of recoverable oil (90,000 net to Beach), will include a 2.7km long horizontal section through the Three Forks Formation reservoir, and be stimulated with a 24 stage fracture stimulation treatment.

Drilling Report - Period ending 1 September 2010

( * )    Operator(s)      Secondary TargetsBPT      Beach Energy LimitedSTO      Santos LimitedSEA      Sundance Energy Australia Limited (ASX:SEA)Helis    Helis Oil & Gas Company L.LCORG      Origin Energy Resources LimitedADE      Adelaide Energy Limited (ASX:ADE) (PINK:ADEZF) 1.-------------------------------------Well                    Participants-------------------------------------Encounter-1             BPT*   90.00%PEL 218                 ADE    10.00%Shale Gas Exploration             C/E Basin, SA------------------------------------------------------------------------------------------------Weekly Progress & Summary                 Primary Targets-----------------------------------------------------------Report Time: 0600 (CST) 01/09/2010        Roseneath ShaleDepth:       0m                           Epsilon FormationOperation:   Moving rig onto location     Murteree Shale             and rigging up.               Progress:    0m-----------------------------------------------------------2.--------------------------------------Well                    Participants--------------------------------------Coonatie-20             BPT     17.14%PPL 131                 STO*    72.32%Gas Development         ORG     10.54%C/E Basin, SA-----------------------------------------------------------------------------------------------------Weekly Progress & Summary                 Primary Targets---------------------------------------------------------------Report Time: 0600 hrs (CST) 01/09/2010    multi Permian targetsDepth:       2779m                       Operation:   Preparing to recommence              drilling operations.Progress:    830m---------------------------------------------------------------3.-----------------------------------------------------Well                     Participants-----------------------------------------------------Henderson 4-26/35H       BPT                   14.70%Sect. 25&36 McKenzie     SEA                     County, Nth Dakota       Helis* plus 7 others     Shale Oil Appraisal Williston Basin          ---------------------------------------------------------------------------------------------------------------------Weekly Progress & Summary                  Primary Targets----------------------------------------------------------------Report Time: 0600 hrs (local) 31/08/2010   Three Forks FormationDepth:       0m                Operation:   Rigging up.     Progress:    0m----------------------------------------------------------------

For the complete Beach Energy drilling report including Well Location Map, please view the following link:

http://www.abnnewswire.net/media/en/docs/63632-ASX-BPT-179362.pdf

Contact

Steve Masters / Nicola Frazer Beach Energy Limited Tel: +61-8-8338-2833