Beach Petroleum has continued its strong operating performance in the December quarter generating record oil production of 872,000 barrels driven by increased oil production from the Callawonga and Parsons oil fields in the Cooper basin.

Record oil and gas production of 2,522,000 barrels of oil equivalent (BOE) was also achieved along with a perfect record in Cooper basin exploration drilling with five successes from five wells drilled. The most significant wells were the Brownlow-1 and Canunga-1 gas discoveries (Beach 50%). Three oil discoveries also made in the Queensland portion of the Cooper Basin.

Beach Petroleum managing director, Reg Nelson, said, "This performance is very creditable when you consider the way the world has changed in recent months." Nelson added that, "Beach benefits from the fact that about 60% of the company's total production is in the form of gas which also contributes around 40% of the company's revenue -- and while oil prices are quite volatile, gas prices are stable in long term contracts," he said. Nelson added that despite the higher production in the December quarter sales revenue was 17% lower at $151.1 million due to lower prices received for most products.

Oil production for the quarter (872 kbbls) was up by 17%, arising from increased contribution from the Callawonga and Parsons Fields in the Cooper Basin as well as higher Basker-Manta production rates. Total production during the quarter was 2,522 kboe, an increase of 2% on the previous quarter. Quarterly oil production (872 kbbl) and total production (2,522 kboe) are the highest yet achieved by Beach.

The average realized oil price in the December quarter, before hedging, was $A85 a barrel, down 39% from the September quarter. But after accounting for oil hedging receipts of $A4.6 million during the quarter, Beach realized an average oil price of $A90/bbl.

For the 6 months to December 2008, Beach secured an average realized price of $A108 a barrel before hedging and $A110 a barrel after accounting for the effect of the maturing oil hedges settled during the period.

Tags: Beach Petroleum Limited