Tipton West Project (Beach 40%)

Beach is funding the initial capital expenditure for Stage 1 of the Tipton West coal seam gas (CSG) project in Queensland's Surat Basin to earn a 40% stake in permit ATP 683P (Dalby Block) and PL 198. Beach has also exercised an option to earn a 40% interest in the adjacent ATP 683P (Dalby Sth Block) by contributing to CSG exploration, and holds a similar option on exploration ATP 689P.

The Tipton West Project involves one of Australia's largest onshore gas fields with more than two trillion cubic feet of possible reserves. The Stage 1 development involves some 75 wells and associated gathering infrastructure and water handling facilities. Drilling started in March 2006 and is expected to continue until December 2006. To the end of August, a total of 42 wells had been drilled and cased; 24 wells had been completed for production and had commenced dewatering the coal seams at approximately 24,000 barrels of water/day. Gas production has also commenced, albeit in small volumes, from 2 wells. Gas production is forecast to steadily increase over the next 6 months as the coal seams are dewatered with first gas sales anticipated in March 2007.