Rising tide at Beach

BEACH Petroleum is poised for rapid production and reserves growth over the next three to five years, managing director, Reg Nelson told shareholders at yesterday's annual general meeting in Adelaide.
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Beach's production levels in the financial year 2006-07 reached nearly 10 million barrels of oil equivalent (MMboe) helping the company generate gross revenue of $554.7 million and net profit of more than $103 million, up by 225%.

At June 30, Beach's reserves stood at 90MMboe, about 62% of which is contracted gas with the remainder being oil or liquids. But Nelson said behind the reserves figure was a resource base almost double the level of reserves, awaiting development.

The large coal seam methane resource at Tipton West in Queensland, combined with the gas and condensate in the Basker-Manta-Gummy field in Bass Strait, stands to yield a further 170MMboe, according to Nelson.

"Our ability to build reserves even at rates of production exceeding 10 million barrels of oil equivalent per annum is very reasonably assured," he said.

"Just by concentrating on developing existing projects, Beach can realistically build from its present reserves base of 90 million barrels of oil equivalent."

Such developments would include new pilot projects at Tipton West - one this financial year alone should more than replace annual production of around 10MMboe, according to Nelson - as well as annual additions of 3-5MMbbl from various Cooper Basin activities and committing to develop the BMG gas condensate resource.

"Without making acquisitions or new discoveries outside these projects, we can reasonably expect to continue producing at these levels - or better - while building the reserves base by 10 to 25 percent," he said.

"But of course our aim is to make large new discoveries that will deliver multiples of net asset backing."

Nelson also said the company planned to make pioneering contributions to geothermal power and carbon capture and disposal.

Through its Paralana geothermal energy venture Beach hopes to establish an environment-friendly power generation scheme.

The company is also working with Cool Energy and Great Artesian Oil & Gas to investigate ways of using depleted Cooper basin gas fields as storage sites for carbon dioxide emissions.