Existing option holders have until 31 March to convert their options and take advantage of the one cent per share dividend payment and the bonus option issue.

Managing director Reg Nelson said the new bonus options would let shareholders increase their exposure to the numerous projects that Beach would be pursuing this year.

“The new options opportunity coincides with the most aggressive exploration drilling program ever by the company with Beach Petroleum participating in 16 wells across four states in the current second half of the 2004-2005 financial year,” Nelson said

This includes the opportunity to increase further Beach’s 25% direct interest in the Basker, Manta and Gummy offshore oil and gas fields of the Gippsland Basin, with the first appraisal well, Basker-2, likely to be drilled there in June.

Other projects included any follow up work on the recently drilled Hurricane prospect, where Beach considered there was a good possibility for a deeper oil accumulation, according to Nelson.

"Beach currently has 42.8 million, 33.5 cent options on issue which will expire, unless exercised, after the exercise date of 31 May this year. Since these are now well in the money, we expect that these will all be converted within the next month or so,” he said.

“However, we anticipate that many optionholders will want to seize the opportunity to convert now and get the benefits of a cash interim dividend plus the bonus option package.”

The current 33.5 cent options in Beach Petroleum were struck in 2002. Their conversion in full will provide the company with about A$14 million in additional working capital.

Beach currently has about 290 million ordinary shares on issue, rising to up to 332.8 million if the current options are fully converted.

At this level, the new one-for-four, 60 cent bonus option would generate up to 83.2 million new options which themselves would generate up to A$50 million if fully taken up in just over a year’s time.