beach sells 10 percent bmg

MEDIA RELEASE
FOR IMMEDIATE RELEASE
BEACH PETROLEUM SELLS
10% STAKE IN BASKER-MANTA-GUMMY PROJECT
Beach Petroleum has sold a 10 per cent equity share in the Basker-Manta-Gummy (BMG)
joint venture in Bass Strait to ITOCHU Corporation of Japan for a total of $A123 million,
valuing the project at $A1.23 billion.
Beach Petroleum, which currently owns a 50% stake, will retain a 40% participating
interest in the project. Anzon Australia has also sold a 10% share in BMG to Itochu under
the same terms as the Beach sale.
Earlier this year, Anzon and Beach, began investigations into the possibility of each
divesting a 10% interest in the BMG project. After a competitive tender process,
negotiations with ITOCHU have been successfully concluded and a conditional agreement,
subject to Designated Authority approval, has been signed by the three parties.
The effective date of the transaction is 1 June 2007. The transaction is expected to have a
material positive impact on Beach's profit result for the year ended June 30, 2007.
The new participant in the joint venture will be CIECO Exploration and Production
(Australia) Pty Ltd, a wholly owned subsidiary of ITOCHU.
Beach Petroleum managing director, Reg Nelson said, “The joint venture welcomes
ITOCHU Corporation as a 20% participant in the project. ITOCHU brings significant
technical and financial strength to the joint venture.”
The BMG project was developed to initially produce oil from the Basker and Manta fields,
based on initial proved and probable (2P) reserves estimates of about 23 million barrels
(MMbbl).
But new wells drilled in 2006 expanded the reserves base with 2P oil reserves now standing
at nearly 40MMbbl while an associated increase in the natural gas resource has nearly
quadrupled estimates of the gas/condensate resource.
Up to 6 new wells are scheduled to be drilled in the fields, commencing with Basker-6 early
in 2008.
On completion the participants in the Basker Manta Gummy Joint Venture will be:
Anzon Australia Limited 40% (Operator)
Beach Petroleum Limited 40%
CIECO Exploration and Production (Australia) Pty Ltd 20%