Beach Petroleum plans active 2006 drilling program

Beach Petroleum Ltd. has planned an active drilling program for the first half of 2006 with 18 wells planned in offshore and onshore basins, and 10 to 15 wells in the second half.

Offshore staff

(Asia-Pacific) - Beach Petroleum Ltd. has planned an active drilling program for the first half of 2006 with 18 wells planned in offshore and onshore basins, and 10 to 15 wells in the second half.

In the first half of the year, four oil development wells are planned in the offshore Gippsland basin Basker and Manta fields.

In a performance report, Beach says Basker-2 was connected to theCrystal Ocean FPSO and began an extended production test on Nov. 14, 2005.

Mechanical problems, primarily associated with the mooring system of the Basker Spirit tanker, hindered production until December 8, when essentially continuous production operations began.

By December 31 the well had produced 227,000 barrels of oil, with Beach's share being 85,000 bbl.

Petroleum production license VIC/L26 was granted over the Basker and Manta fields on Oct. 28, 2005.

A contingent gas resource of 94 bcf is identified in the Manta and Gummy fields.

Beach is required to pay further premiums totalling up to $7.5 million if these fields are developed for gas production.

In October, Anzon Australia, as operator of the Basker-Manta-Gummy (BMG) Joint Venture, announced the results of an independent assessment of oil reserves in the Basker and Manta fields incorporating the results of the Basker-2 well.

Recoverable oil reserves in Basker and Manta in October 2005 were: 11.4 MMbbl of proved, 30.1 MMbbl of proved and probable, and 69.8 MMbbl of proved, probable, and possible.

This represents a 30% increase in proved + probable reserves, which had previously been assessed to be 23.3 MMbbl.

* Canterbury basin ¿ offshore New Zealand

Beach has entered into a farm-in agreement with Tap Oil Ltd. and Australian Worldwide Exploration Ltd. in relation to PEP 38259, an exploration tenement in the Canterbury basin, offshore of the south eastern coast of the South Island of New Zealand.

Beach will earn a 20% interest in the tenement by contributing to the cost of the Cutter-1 oil exploration well.

Cutter-1 is scheduled for drilling in 3Q 2006 and is assessed by Tap Oil (operator) to have the potential to contain recoverable oil reserves of up to 80 MMbbl.

* Basker-Manta-Gummy project -- Acquisition of further equity

In December, Beach exercised an option to acquire from Anzon Australia Ltd. a further 12.5% interest in the (BMG) oil and gas project, increasing Beach's equity in the project to 50% from Jan. 1, 2006.

01/30/06

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