BEACH PETROLEUM ANNOUNCES 282% JUMPIN SURAT BASIN COAL SEAM GAS...

BEACH PETROLEUM ANNOUNCES 282% JUMP
IN SURAT BASIN COAL SEAM GAS RESERVES

Beach Petroleum Limited (ASX: “BPT”) today announced a 282% increase in its proved
and probable coal seam gas reserves within the energy group’s Surat Basin tenements in
central Queensland.
An independently certified report has upgraded Beach’s proven and probable (2P) coal
seam gas reserves in the Surat Basin to 443 petajoules (PJ) from 116 PJ certified just
seven months ago.
The independent consultants have also lifted the Company’s proven (1P) Surat reserve
entitlements by 45% to 94 PJ from a previous reserve certification of 65 PJ at the end of
December 2007.
The upgrades follow ongoing development drilling, continued strong production trends
and new reserves from deeper coal seam measures within the Surat interests.
Beach has a 40% interest in various tenements in the Surat Basin, 25 kilometres
southwest of Dalby in Queensland, with Operator, Arrow Energy Ltd (ASX:“AOE”)
holding the remaining 60% interest. The tenements include the Tipton West block from
which the Tipton West Field is already producing, the Dalby South block and the
Millmerran block.
The extensive acreage contains total proved, probable and possible (3P) reserves of 2078
PJ or approximately 2 trillion cubic feet (tcf) of gas.
The reserves report was prepared for Arrow by independent consultancy, Netherland,
Sewell and Associates, Inc. Expressed in millions of barrels of oil equivalent (mmboe),
the increase in Beach’s Surat reserves is summarised below, using a conversion factor of
5.82 PJ/mmboe.
- 2 -
Beach net reserves in PJ (mmboe)
1P 2P 3P
June 2007 10 (2) 69 (12) 906 (156)
December 2007 65 (11) 116 (20) 925 (159)
June 2008* 94 (16) 443 (76) 831 (143)
(* Adjusted for approximately 8 PJ of gas produced to date).
The latest Surat increase, flagged by Beach in June, takes the Company’s total oil and
gas reserves at 30 June 2008 to approximately 148 million barrels of oil equivalent
(mmboe).
“This substantial CSG reserves upgrade underpins Beach’s confidence in the value of the
Tipton Field and associated reserves in the Surat Basin region,” Beach Petroleum’s
Managing Director, Mr Reg Nelson, said today
“The upgrade also provides further evidence of the major position held in Queensland
and Australian energy-supply markets by the nation’s burgeoning coal seam gas
industry,” Mr Nelson said.
“We have always believed that Beach will accrue significant value from the growth of
this sector and have secured a demonstrable position in Queensland’s CSG sector that is
close to trunk pipelines and solid demand from industrial users.”
The Tipton West field is currently producing gas at the rate of 24 million cubic feet a day
(mmscfd) with the best performing well producing at around 1.2 mmscfd.
The Beach-Arrow joint venture’s field production and gas sales to the new 450 megawatt
Braemar Power Station, 45 kilometres to the northwest of the field, continue to ramp up
under a contract to provide 136 PJ over 15 years to the station.
The bulk of Tipton West production until recently has been from the shallower Juandah
coal measures, but Mr Nelson says results from the deeper Taroom measures continue to
impress with flow rates averaging 350 mmscfd per well.
Mr Nelson said certification of the deeper Taroom reserves was of particular value as
development of the Taroom would require significantly reduced investment through
sharing of infrastructure with existing Juandah seams wells.