The company said the initial 10-day well test confirmed the oil-producing Patchawarra sandstone at 1941-1946 metres has good reservoir quality and is laterally continuous.

Beach said it planned to continue production at about 450 barrels of oil per day.

Between late January and early February, Beach will perforate a lower sand, from 1964.5-1967.5 metres, which is expected to initially add a further 200-400 barrels of oil per day to the production rate.

Plans are also progressing for the mid-2006 installation of water handling facilities and artificial lift.

Located in the Cooper/Eromanga Basin, Kiana-1 about 2km southwest of the Muteroo Oil Field, 2 kilometres northeast of the Spencer Oil Field, and 35 kilometres west of Moomba.

Joint venture partners in Kiana-1 are: Beach Petroleum Ltd. (operator and 40%), Great Artesian Oil and Gas Ltd (30%) and Magellan Petroleum Australia Ltd (30%).