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Beach will pay Anzon Australia $50 million for the additional 12.5% interest in the producing fields.
This is the second time Beach has increased its interest in the BMG project, its first offshore oil production in Australia. In August, it increased its interest to 37.5% from its original 25% stake.
The remaining 50% is held by Anzon, which is also operator of the joint venture. But in addition to its direct interest in BMG, Beach also owns a direct 9.6% equity stake in Anzon.
“The move will increase Beach’s proved and probable (2P) oil reserves by 3.8 million barrels and add nearly 1 million barrels of oil to its anticipated 2006/07 production,” Beach Petroleum managing director Reg Nelson said.
“On current oil price values, this will add around A$70 million per year to Beach’s gross revenue.”
The acquisition will be funded from a combination of existing cash reserves, cashflow and debt.
The Basker and Manta fields have 2P recoverable oil reserves of 30.1 million barrels. In addition, a contingent gas/condensate resource of 19.2 million barrels of oil equivalent has been identified in the Manta and Gummy Fields.
Last month, the Basker-2 well moved to extended production testing, using a combination of the Crystal Ocean FPSO (floating production, storage and offtake vessel) and oil transfers to the 650,000 barrel capacity Basker Spirit tanker moored 1.5 kilometres away, for storage and subsequent sale.
Basker-2 is currently producing about 10,000 barrels of oil a day – a rate Nelson described as “highly pleasing and on target”. First oil sales are expected in mid January, he said.
Beach will also be responsible for future capital and operating costs associated with the 12.5% interest from the effective date.
Meanwhile, the joint venture will shortly start a full-field development program. This involves drilling another four oil wells in the next six months and lead to the start of full field production in the third quarter of 2006, Beach said.
The first of these wells, Manta-2, is scheduled to spud in mid January.
