The company will earn a 16.7% interest in WA-264-P in the offshore Carnarvon Basin of Western Australia by contributing to the drilling of an exploration well in the second half of 2004.
Beach is acquiring its interest from Santos, which will retain a 50% interest and operatorship of the WA-264-P Joint Venture with the remaining 33.3% held by Kufpec Australia.
The partners plan to drill one well later this year in the vicinity of Corowa-1, which discovered oil in the Early Cretaceous Birdrong Sandstone in 2001, encountering 11 metres net of oil pay in the Birdrong and flowed oil on test at 4,534 barrels of oil per day, with no oil/water contact defined.
Corowa-1 is located in 85 metres of water and is about 40 kilometres west of the Thevenard Island production facility.
"Prospects in WA-264-P are in shallow water and present relatively low cost exploration opportunities," Beach Petroleum's managing director, Reg Nelson said today.
"Beach's exploration strategy has historically included up to 10% of its portfolio in offshore targets and WA-264-P represents a timely opportunity to return to such a play."
Santos managing director John Ellice-Flint said the addition of Beach to the venture made good sense and would have a positive impact on field development.
"The farm-out is good portfolio management. Bringing in a new joint venturer means we can accelerate the appraisal and development of the Corowa field,"
Beach Petroleum's previous offshore wells have been in the Carnarvon, Browse and Bonaparte Basins, offshore northwestern Australia.
The company's primary focus in the past two years has been successfully drilling proven and perimeter areas of the Cooper Eromanga Basins in far north South Australia and southwest Queensland.
Last month, Beach reported a 30% stronger first half net profit after tax of $4.4 million for the six months to 31 December, 2003.
Revenue for the period climbed 7% to $18.2 million from $17.1 million previously with production 4.8% higher at 464,951 barrels of oil equivalent (boe) for the six months.
The new interests in WA-264-P are Santos Offshore (operator) 50%, Kufpec Australia 33.33% and Beach Petroleum 16.67%.
