(Asia-Pacific) - Australian explorer Beach Petroleum Ltd. says it will raise its stake to 50% in the Basker-Manta-Gummy (BMG) oil and gas fields in the Gippsland area of Bass Strait.
On Jan. 1, 2006 the company will exercise its option to take 12.5% from Anzon Australia Ltd. for $37.8 million.
Beach had increased its BMG interest to 37.5% from its original 25% in August.
Anzon holds the remaining 50% and the field operatorship.
"The move will increase Beach's proved and probable oil reserves by 3.8 MMbbl and add nearly 1 MMbbl of oil to its anticipated 2006/07 production," Beach's Managing Director Reg Nelson said in the announcement on December 15.
"On current oil price values, this will add around $52.9 million per year to Beach's gross revenue.
"We have great confidence in this project and in the ability of Anzon, as operator, to maximize its value. We expect that revenue from Basker-Manta-Gummy will provide a strong base for Beach's further growth."
The acquisition will be funded from a combination of existing cash reserves, Beach's strong cash flow and debt.
The Basker and Manta fields have proven and probable recoverable oil reserves of 30.1 MMbbl. In addition, a contingent gas/condensate resource of 19.2 MMboe has been identified in the Manta and Gummy fields.
The Basker-2 well moved last month to an extended production testing regime, using a combination of the Crystal Ocean FPSO and oil transfers to the 650,000 bbl capacity Basker Spirit tanker moored 1.5 km away, for storage and subsequent sale.
Nelson says Basker-2 is currently producing at around 10,000 b/d of oil ¿ a rate he describes as "highly pleasing and on target."
First oil sales are expected in mid-January.
The joint venture will soon begin a full field development drilling program, which will see four further oil development wells drilled over the next six months and lead to the start-up of full field production in 3Q 2006.
The first well, Manta-2, is to be spudded in mid-January.