Beach Petroleum reports that Callawonga-1 commenced oil production on Saturday 18 November.

Callawonga-1 is located in PEL 92 (Beach 75% interest), in the South Australian portion of the Eromanga Basin, approximately 90 km northwest of Moomba and 7 km north of the Christies oil field. It was drilled in July 2006, encountered 8 metres of net oil pay in the Namur Sandstone and flowed oil on drill stem test at a rate of approximately 2,400 barrels of oil per day.

On 20 November the well was producing on free-flow at a rate of approximately 2,100 barrels of oil per day. Oil is being primarily transported by truck to Tantanna (a distance of approximately 40km) and by pipeline from there to Moomba.

Beach assesses P50 recoverable oil reserves in the Callawonga Field to be 1.5 million barrels (Beach Share 1.1 million barrels).

Callawonga-1 is the most westerly oil production achieved to date in the Cooper/Eromanga region and demonstrates the high oil prospectivity of PEL 92, particularly in the area west and north of the Christies Field. The PEL 92 Joint Venture has recently acquired a 3D seismic survey in this region, the results of which will be used to better delineate Callawonga and identify prospects for drilling in 2007.

Participants in Callawonga-1 and PEL 92 are:

Beach Petroleum Limited (Operator) 75%

Cooper Energy Limited 25%