The company said on Friday it had entered into an agreement with Essential Petroleum Resources to acquire a further 32.5% interest in Otway Basin lease VIC/P46, which covers a large slice of offshore waters near the coast between Portland and the South Australian border. This acquisition will increase Beach’s equity in the permit from 17.5% to 50%.

First drilling is scheduled for 2007, with Beach taking over the operatorship from Essential, the current operator.

Essential will retain a 25% interest in the tenement with the remaining 25% stake held by Mitsui subsidiary, Mittwell Energy Resources.

“The acquisition provides Beach with a more substantive entry into western Victoria’s offshore gas potential,” Beach managing director Reg Nelson said.

“It also brings added balance and spread of risk across our suite of production and exploration assets primarily in the onshore Cooper Eromanga Basin, the Tipton West coal seam investment in Queensland and the producing Basker Manta oil development project in the Gippsland Basin area of Bass Strait.

“VIC/ P46 has several large mapped gas prospects. The largest prospect, Fermat, has the potential to be twice the size of the recently commercialised Casino gas field to the east and just offshore from Port Campbell.”

Fermat could hold more than 1 trillion cubic feet of gas, according to Nelson.

A commercial gas discovery would have a distribution outlet through a grid connection to the main SEAGAS pipeline north of Portland, or to the eastern states network via existing connections around Warrnambool, he said.

“Success would also bring natural gas into commercial consideration for heavy industry in the Green Triangle region, which can be stretched in sourcing sufficient and stable energy feedstock supplies,” he said.

Beach is already participating in offshore production through its 50% ownership of the Basker Manta project in the Gippsland Basin area of Bass Strait in eastern Victoria.

The second tanker load of crude oil of more than 410,000 barrels, of which Beach is entitled to half, is due to leave the Basker field today, amid the current four-well development drilling program on Basker Manta.

Beach Petroleum has also participated in drilling in the Carnarvon Basin, offshore Western Australia. This area will again be targeted, along with the Canterbury Basin offshore on the eastern side of New Zealand’s South Island, within the next 18 months.