The company has entered a Heads of Agreement with Great Artesian Oil & Gas to farm-in to a portion of PEL 106 in the South Australian section of the Cooper Basin, with a focus on the block's gas potential.
"This is Beach's first serious gas push in the Cooper Basin under a strategy to add more gas to our total production from new exploration in the Cooper and existing fields in the Otway Basin," said Beach's managing director, Reg Nelson.
"It is the first of a number of initiatives going into 2004 to accelerate exploration and production and capitalise on Beach's prime position in these core areas."
Addressing shareholders at Beach Petroleum's annual general meeting in Adelaide, Nelson also announced the full benefits of the acquisition two years ago of the Bodalla/Kenmore blocks in southwest Queensland were now being realised, with total group reserves growing 18% from 3.6 million boe to 4.5 million boe by 30 June this year and before recent development successes in the Kenmore fields.
By next month, new wells will have been completed in the Kenmore field, with the combined potential to increase proved and probable reserves (2P) by more than 1 million barrels of oil
The expanded Kenmore output, which will today see the first production from Kenmore-29 and the spudding of Kenmore-30, was more profitable than oil discoveries in the South Australian section of the Cooper/Eromanga Basin.
Kenmore-29 was anticipated to flow today at around 1,000 barrels of oil per day.
Nelson said that as a result of the company's exploration and production successes, the equities market was belatedly beginning to understand what Beach had been saying all along - "that the Cooper/Eromanga offers numerous opportunities to discover relatively low-risk 1-2 million barrel recoverable targets".
"Each of these may be worth $20-30 million at today's oil prices and the resulting cashflow can be quick and positive," Nelson said.
"We have now started to identify larger targets for drilling and believe there may be potentially larger plays (10-20 million barrels) in new unexplored areas of the Cooper/Eromanga.
"Our program in the past five months has been bold, has achieved an unprecedented level of activity compared to our industry peers and has seen 10 wells drilled, three completed as commercial producers and two to be drilled before the end of the year."
