***basker-2 drilling underway***, page-3

$250m Bass Strait drill project

By Barry Fitzgerald
Resources Editor, THE AGE NEWSPAPER
August 16, 2005

Several firsts for Bass Strait are to be notched up with the rapid-fire $250 million development of the Basker Manta oil project by the Anzon and Beach Petroleum joint venture.

The drilling rig Ocean Patriot has started to drill the first of the development's appraisal wells at the Basker-2 site, 90 kilometres south-east of Lakes Entrance, with first oil to flow from what amounts to an extended production test in October at a rate of up to 8000 barrels a day.

A semi-submersible drilling rig, the Ocean Patriot is expected to take up to 40 days to drill and complete Basker-2 to its total depth of 3360 metres.

The development delivers the first offshore production for both companies and will be the first significant Bass Strait oil production outside the Esso/BHP Bass Strait partnership. It will also be the first to use a floating production, storage and offtake (FPSO) facility instead of the platform route traditionally used in Bass Strait.

The project's FPSO vessel, the Crystal Ocean, formerly worked in the North Sea. It is being refitted in Singapore before making its way to Bass Strait, where its oil will be offloaded into a shuttle tanker, the Basker Spirit. Reserves at Basker Manta stand at 23.3 million barrels of oil, making the development small by previous Bass Strait standards but still lucrative because of booming oil prices and the innovative development technique.

Anzon executive chairman Steven Koroknay said Basker Manta oil would be followed by the planned gas development of the Manta and Gummy fields. "Basker Manta is our first revenue-generating cornerstone project and is clearly in line with our strategy to acquire assets where we, as the operator, can control our destiny and returns to shareholders," he said.

Beach managing director Reg Nelson said the project was a step change for the company. The group's Basker Manta entitlements would lift its annual production to between 2 and 3 million barrels of oil by 2007.

"At the top end of the scale, this would triple Beach's production of just over 1 million barrels for the latest financial year — and rank Beach alongside the likes of AWE, Roc Oil and Arc Energy," Mr Nelson said.