Australia: Beach Energy Announces Monthly Drilling Report

Beach Energy Limited is pleased to release monthly drilling report ending 5 January 2011.

Beach Operated Cooper-Eromanga Basin Gas – PEL 106FI Block

Canunda-1 extended production testing will recommence after a workover to retrieve wireline and pressure gauges from the well and reconfigure production zones. It is anticipated that testing will recommence around Feb 1. The evaluation is intended to define size and production characteristics of this high liquids gas field (Beach 50%).

Cooper Basin Oil and Gas Development – Santos Operated

Tirrawarra-78 (Beach 20.20%) gas development well has been cased and suspended as a future gas and oil producer. The rig will now move to Tirrawarra-80. Drilling at the Coonatie-15 gas development well (Beach 17.14%) has commenced and is currently drilling ahead in the Adori Sandstone. Development drilling on the Cook Field (Beach 20%) has commenced with the Cook-15 and Cook-19 wells being cased and suspended as oil producers. Cook-18 is currently drilling ahead.

Beach Operated Cooper Basin Shale Gas Exploration – PEL 218

Drilling operations for Encounter-1 (Beach 90%), the first of a two well, back-to-back exploration program targeting shale gas potential in the South Australian portion of the Nappamerri Trough, were completed during the reporting period. A total of five cores were taken in Encounter-1 and these are currently being analysed for gas content, physical and mechanical properties. Encounter-1 intersected 30% more target section than predicted and the interval appears to be gas saturated with no evidence of water through and into the underlying Patchawarra Formation. This is a best case scenario for fracture stimulation as the thicker interval and absence of water reduces the risk of fracturing into zones that may produce formation brines. An eight zone fracture stimulation treatment is planned for Encounter-1 early in the second quarter of 2011 once the second shale gas well, Holdfast-1, has been drilled. The rig is currently moving to the Holdfast-1 location.

Beach Operated Geothermal – Paralana Project, Arrowie Basin

After extended delays due to weather, crew and equipment associated with the injectivity test were mobilised to Paralana-2 (Beach 21%) in late December. Coiled tubing was used to displace the existing heavy brine solution in the casing with water and the well was then perforated and an injection test conducted. The zone was successfully fractured and data from the test will be used to design the main fracture stimulation treatment which is expected in the first quarter this year.

Beach Operated Gippsland Basin – PRL-2

Well testing operations commenced on Wombat-2 in PRL-2 (Beach earning up to 33.3%) on 17 December. Wireline gauges were run in hole prior to opening the well for flow testing. The well was flowed through a separator for twelve days at an average rate of approximately 0.8 mmscfd on a 1” choke and is currently shut in for a four week build up. The down-hole gauges will be recovered in late January.

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Source: Beach Energy, January 5, 2010;