Beach Petroleum Ltd has joined an exclusive club of Australian petroleum companies with a market capitalisation of more than $1 billion following its recent $247 million rights issue.

Funds from the capital raising will be used to repay part of the bridging facility established by the company to acquire the Delhi Petroleum group, Managing Director, Reg Nelson, said.

Beach’s recent $247 million rights issue, to repay part of the bridging facility established by the company to acquire the Delhi Petroleum group, has resulted in the company’s total issued capital growing to approximately 790 million shares.

“Strong growth in the company’s oil and gas production rates and a dramatic expansion of its petroleum reserves has resulted in a massive expansion of the company’s worth in the past two years”, Nelson said.

“In September this year the rapid growth of Beach Petroleum was recognised by the inclusion of the company into the S&P/ASX 200 index, confirming its status as one of Australia’s fastest growing oil and gas exploration and production companies.”

With a growing portfolio of petroleum exploration and production assets, Beach Petroleum is now one of Australia’s leading oil and gas companies. The company reported net profit after tax and outside equity interests of $43.99 million for the year to 30 June, up from $16.83 million a year earlier. Its oil and gas revenue almost doubled from $63.36 million in 2005 to $123.99 million in the June, 2006 year.

Five years ago, Beach Petroleum’s annual sales revenue was only $9.2 million. Capitalised at more than $1 billion, Beach Petroleum has joined established oil and gas producers like BHP Billiton, Woodside Petroleum, Santos Ltd, Oil Search Ltd, Origin Energy and AWE Ltd on the list of Australia’s top petroleum companies.

Nelson said Beach Petroleum’s rapid market growth is the result of a successful exploration campaign in the past few years, corporate success and, recently, the $590 million purchase of a 21% share in the Cooper basin oil and gas operations, through the acquisition of Delhi Petroleum.

“The company’s growth is the result of a highly successful strategy of creating shareholder wealth through exploration and by a careful programme of asset acquisition”, Nelson said. “Creating wealth by adding value to the company for Beach shareholders is the primary objective of our management team.”

“Strong energy prices have provided the incentive for Beach Petroleum to significantly expand its exploration efforts in the current year. We aim to continue building the value of the company through exploration and by acquisition.”

Meanwhile, Beach Petroleum has reported that interpretation of the results of extended production testing of the Middleton-1 and Udacha-1 discoveries in the Cooper Basin, about 50 km northwest of Moomba, indicates gross proved and probable recoverable sales gas reserves of 6.3 PJ and 3.4 PJ, respectively.

Chief Operating Officer, Hector Gordon, said the development of the fields and commencement of gas production are now subject to negotiation of gas sales agreements and/or access arrangements with respect to exiting infrastructure. Middleton-1 was drilled in February 2006 and flowed gas on drill stem test (DST) at rates of up 12 MMcfd from the Patchawarra Formation.

“Production testing indicates that similarly high rates can be achieved from Middleton-1 when sales commence”, Gordon said. “Udacha-1, also drilled in early 2006, flowed gas on DST at approximately 0.4  MMcfd. However, test results indicate that rates in excess of 2 MMcfd should be achievable with fracture stimulation.”

“Beach considers that the Middleton/Udacha area has high prospectivity for further high deliverability gas discoveries. A 180 km2 3D seismic survey will be acquired in this area in early 2007, to be followed by further exploration drilling later that year.”

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Beach Petroleum reported net profit after tax and outside equity interests of $43.99 million for the year to 30 June, up from $16.83 million a year earlier. Its annual sales revenue was only $9.2 million five years ago.