NEWS ARCHIVE

What or who can Beach buy with $34 million?

Beach Petroleum is stocking up the war chest with a two-tiered capital raising that will put up to $34 million into the fighting fund for the continued growth of the company's oil and gas operations.

What or who can Beach buy with $34 million?

Analysts are already speculating as to whether the money could be used in a takeover bid for some of the company's successful junior partners in the Cooper Basin, such as Cooper Energy.

Having listed only 18 months ago Cooper has a 30% stake in the 3-4mmbbl reserves of the Worrior-1 well, as well as interests in the Sellicks and Christies-1 wells, all of which would add significantly to Beach's production levels.

Although unable to be reached for comment yesterday Beach managing director Reg Nelson alluded to the fact that the company could be eyeing off some of its neighboring producers. In an ASX release, Nelson said the funds raised would enable Beach to continue its assessment of the various growth options through acquisition.

However, Nelson also said in the statement that the capital raising would be used to strengthen the company's balance sheet and enable further exploration and development of its oil and gas projects throughout Australia.

"This will include accelerating the exploration effort on several of Beach's key prospects and the commencement of drilling some of our larger oil field targets in the Cooper Basin," Nelson said.

"An example of such targets is the Waitpinga prospect, where, next month we expect to spud the first exploration well which will target recoverable oil reserves of up to 17 million barrels.

"And, in Queensland, we will double the number of exploration wells in the Kenmore field from two to four wells, following the recent successful drilling of the Kenmore-28 well, which already is producing at a daily rate of 1000 barrels of oil."

"Our move to 100% ownership of the Bodalla oil fields and the resultant quick returns have already shown the benefit to shareholders of acquisitions, and we are regularly on the look-out for similar opportunities - whether they be farm-ins, the purchase of new acreage, or other growth avenues," he said.

The capital raising will be done with a combination of a fully underwritten Share Purchase Plan (SPP) for shareholders of the company, in conjunction with a placement of ordinary shares to institutional investors.

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