ANNOUNCEMENT TO ASX BEACH PETROLEUM ANNOUNCES $50 MILLION...

ANNOUNCEMENT TO ASX BEACH PETROLEUM ANNOUNCES $50 MILLION TAKEOVER OFFER FOR DRILLSEARCH ENERGY LIMITED The scrip offer by Beach values Drillsearch at 3.00 cents ($0.03) per share, a premium of 50.0% to the Drillsearch 3 month volume weighted average price Beach has pre-bid agreements from Drillsearch shareholders representing 4.74% of Drillsearch which, in addition to Beach's current holding, gives Beach a 10.04% relevant interest in Drillsearch Beach offer presents an opportunity for balance sheet strength, management cohesiveness and liquidity to Drillsearch shareholders at a time when all these are lacking
Beach Petroleum Limited ("Beach," ASX:BPT) announces its intention to make a $50.0 million conditional offer (the "Offer") for Drillsearch Energy Limited. (“Drillsearch,” ASX:DLS). The Offer to Drillsearch shareholders is an all share offer in which Beach will offer Drillsearch shareholders 1 Beach share for every 27 Drillsearch shares held (1-for-27). This ratio was calculated on a 3 month volume weighted average price (“VWAP”) basis for both DLS and BPT and represents a 20% premium to Drillsearch’s closing price of 2.50 cents ($0.025).
2
Beach has also entered into pre-bid agreements with a number of Drillsearch’s large shareholders, totaling 79,206,622 shares or 4.74% of Drillsearch’s issued shares. This, in addition to Beach’s existing shareholding in Drillsearch, gives Beach a relevant interest of 10.04%. Acquisition Rationale
The Offer
Provides an opportunity to develop Drillsearch’s assets through the financial strength of Beach at a time when raising exploration funds for small capitalised companies is extremely difficult. Beach has a strong balance sheet, Drillsearch does not.
Would entrust the Drillsearch assets to a very reputable management team with a sound track record of developing and growing oil and gas assets. Beach has a strong management team. Drillsearch currently has no Managing Director and a Board that appears to be in disarray.
Would consolidate permit ownership interests in the Cooper Basin and deliver greater efficiencies, in Beach's view. Beach is an experienced, low cost operator of Cooper Basin Assets.
Why Drillsearch Shareholders should accept the Beach offer:
They will gain access to the benefits of:
Exposure to an Australian S&P/ASX 200 listed energy company of substance; Beach’s substantial portfolio of diversified exploration, development and production assets across a range of geographical regions, including:
o Substantial Reserves of Oil and Gas;
o Oil and Gas production for the period 1 July 2008 to 31 March 2009 was 7.4 million barrels of oil equivalent; and
o An active, well balanced drilling program within a diverse portfolio of tenements. Significantly greater share trading liquidity – for the 12 months to 4 May 2009, Beach had a turnover of approximately 167% of the total Beach registry, whereas Drillsearch had a turnover of only 33% of the total Drillsearch registry; Significantly greater exposure to development opportunities through Beach’s existing balance sheet and cashflow generating assets, at a time of considerable financial and economic volatility and uncertainty on global markets. An investment in a company with a consistent record of consecutive dividend payments.