Beach Petroleum NL - already one of the new breed of Cooper Basin oil and gas companies - announced today that it had reached agreement to join Sydney-based Great Artesian Oil and Gas Limited (GAOG) in a new round of exploration due to commence in the December quarter.
The area of the new search program is immediately north of the oil discovery made by Beach in July this year at Sellicks-1 in PEL 92, 75 km west of the Moomba production facilities.
Under the new farm-in agreement, Beach will earn up to a 50% interest in exploration tenement PEL 91 which abuts the northern boundary of Beach's PEL 92 interests.
"The Sellicks-1 discovery, which flowed oil at about 2,000 barrels per day from the Permian Patchawarra Formation, has upgraded the prospectivity of PEL 9, held 100% by GAOG," said Beach Petroleum's managing director, Reg Nelson.
"Beach will earn a 40% interest in PEL 91 by contributing to the cost of initial exploration activity, including the acquisition of seismic during the fourth quarter of 2002, followed by exploration drilling in 2003.
"We have the option to earn an additional 10% interest in PEL 91 by contributing to further activity and will act as operator of the PEL 91 joint venture during the farm-in program and any resultant production activity in the permit."
Mr Nelson also commented on the start of production from Sellicks-1 just four months after discovery "indicating how quickly these margins of the Cooper Basin can be commercialised."
"We are using Beach's operational centre at Bodalla and our experienced people to bring Sellicks-1 into full operation quickly and cost-effectively," he said. Mr Nelson said he expected an initial production rate from Sellicks-1 of approximately 1000 barrels of oil per day.
Beach also announced today the spudding this morning of the Henley-1 oil exploration well in PEL 95.
This is the fourth well in the company's initial four well drilling campaign in the western and southern margins of the South Australian sector of the Cooper Basin. Henley-1 is located 85 km southeast of Moomba and 13 km south of the Toolachee Gas Field.
Mr Nelson said Henley-1 would test a well-defined structure with assessed potential mean recoverable reserves of more than 1 million barrels of oil. The structure lies at the head of a prominent east-west structural nose that is interpreted to provide a focus for oil migration into the trap.
The well's primary target, the Namur Sandstone, is expected to be intersected over the weekend while the secondary targets, the Hutton Sandstone and the Patchawarra Formation, are expected to be intersected early next week.
The well will take approximately eight days to reach its planned total depth of 1640 metres. Participants in the PEL 95 Joint venture are Beach Petroleum (operator and 50%) and Magellan Petroleum (50%) 2001/2002 full year results.
