Beach Energy: Quarterly Report to 31 December 2010 (Australia)

January 27, 2011

Beach Energy today announced activities report for the quarter ended 31 December 2010.

Corporate

● Achieved majority control of Impress Energy Limited via an onmarket takeover offer of 8.5 cents per share (current holding 69%).

● Beach in discussions with Santos for the supply of 750PJ (152PJ net to Beach) of gas from the South Australian Cooper Basin Joint Venture (SACB JV) to Santos’ GLNG project.

● Beach and ITOCHU investigating proposed LNG project.

● Approximately $11 million (excluding GST) received for the sale of the bulk of Beach’s remaining crude oil inventories in the Jackson-Moonie crude oil pipeline. Subsequent Events

● $8.7 million received for the sale of a part of Beach’s Sundance Energy Ltd shareholding, generating profit of $7.1 million.

Operations

● Shale target zone at Encounter-1 thicker than expected and fully gas saturated – the well has been cased and suspended for future fracture stimulation.

● Successful fracture stimulation of a second well in Bakken unconventional oil play in North Dakota, USA.

● Beach’s first Western Desert oil well spudded in the Abu Sennan concession, Egypt, as part of a multi-well campaign.

● Gravity and magnetic surveys completed over Lake Tanganyika in East African Rift of Tanzania.

● Beach operated production continues to perform strongly and above expectations.

● Total production of 1.7MMboe, down 7% from last quarter, mainly due to the BMG project entering a non-productive phase as planning for second gas-liquids phase continues.

● Flood mitigation planning continues to minimise the impact of both local rain and rain in the catchment area of the Cooper Creek system on Beach operated production.

● Kudnarri Bridge completed over Cooper Creek providing access to Western flank oil province for 2011 drilling campaign.

Financial

● Revenue increased by 16% for the quarter, largely due to higher prices received per barrel of oil equivalent.

● Cash reserves remained strong with $178.6 million at quarter end.

Key Statistics

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Source: Beach Energy, January 27, 2011;