The new program will see Beach drill 69 oil and conventional gas exploration and appraisal wells in 2006-07 – up from 19 in the current year. The aggressive exploration push does not include Beach’s current participation in a 75-well program in the Tipton West coal seam methane project in Queensland.
The company said the heightened drilling program is designed to increase annual production to above 5 million barrels of oil equivalent (boe) in 2007-08. This compares to an output of 1.4 million bbl of oil this year.
Drill targets include an offshore Australian oil prospect, the company’s first offshore target in New Zealand and a Surat Basin well in Queensland – as well as current operations in the onshore Cooper-Eromanga basins and the offshore Gippsland Basin.
Beach’s 2006-07 drilling schedule includes 43 exploration wells – 39 in the Cooper/Eromanga Basin and one in each of the Surat, Otway, Carnarvon and Canterbury (New Zealand) basins. The company will also be involved in the drilling of 26 appraisal wells – one in the Gippsland Basin with the remainder in the Cooper/Eromanga Basin.
“Our objective is to rapidly add to reserves in excess of production through exploration success, and minimise production costs per barrel,” Beach managing director Reg Nelson said.
“Beach has increased reserves to around 30 million boe currently despite successive increases in annual production over the past five years. Strategically, our forecast production and minimum reserve targets have been set on current assets and their known or estimated performance ceilings and are exclusive of contributions from future acquisitions.”
The company’s expected major production contributors in the next 12 months will be Beach’s key assets in the Cooper/Eromanga and Gippsland Basins.
The offshore Gippsland Basker-Manta oil project last month completed a successful extended production test and will move to full field production in October at an expected production rate of approximately 12,500 bbl of oil per day, net to Beach.
First sales from the 40%-owned Tipton West (Queensland) coal seam gas fields – potentially one of Australia’s largest onshore gas resources projects – are expected in March next year.
Nelson said Beach would also benefit from the emerging gas potential of the Cooper/Eromanga Basin, in partnership with the company’s strong oil production from the province and its recent move to take a strategic $14.5 million or 19.9% stake in Cooper Basin producer, Great Artesian Oil and Gas.
