BEACH ENERGY LIMITED — Annual Report 2009

Sep 29, 2009

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Shareholder
UPDATE
09
FINANCIAL YEAR ENDED 30 JUNE
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www.beachpetroleum.com.au

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FULL YEAR
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FinAnCiAL yEAR EnDED 30 JunE 2009 (Fy09) BEnCHmARkS

(previous year in brackets)

• Divested Tipton West assets for up to $400 million.

• Record oil and gas sales, $581 million ($564 million) up 3%.

• Further exploration success on Cooper Basin’s western flanks.

FinAnCiAL ACHiEVEmEnTS

(previous year in brackets)

Bob kennedy CHAIRMAN 28 AUGUST 2009

• Net profit after tax $260 million ($64 million), up 309%.

• Normalised net profit after tax $64 million ($53 million), up 21%.

• 100% of debt repaid.

• Total dividends 3.75 cents (1.75 cents) per share.

OPERATiOnS ACHiEVEmEnTS

(previous year in brackets)

• Record annual production of 9.6 MMboe* (9.3 MMboe).

• Reserve additions of 5.9 MMboe in the Cooper Basin and 2.2 MMboe in Egypt, the first reserves booked by Beach in that area.

• Contingent Gas Resources of 1,309 PJ identified in the Cooper Basin.

*MMboe represents million barrels of oil equivalent

NET PROFIT AFTER TAX 309%

Reg nelson MANAGING DIRECTOR 28 AUGUST 2009

Competent Persons Statement

This report contains information on Beach’s Reserves and Resources which has been compiled by Mr Gordon Moseby and Mr Neil Gibbins, who are full-time employees of Beach, are qualified in accordance with ASX listing rule 5.11 and have consented to the inclusion of this information in the form and context in which it appears.

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The annual meeting will be held as follows:
ADELAIDE CONVENTION CENTRE
AGM
Place NORTH TCE, ADELAIDE SA 5000
Date THURSDAY 26 NOVEMBER 2009
Time 10.30 AM
Approximate date the Annual Report will be available 23 OCTOBER 2009
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BEACH : SHAREHOLDER REPORT : FINANCIAL YEAR ENDED 30 JUNE 2009

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KEY FINANCIAL
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SUMMARY OF FULL YEAR Increase /
FY09 FY08
FINANCIAL RESULTS (Decrease)
PROFiT AnD LOSS
Oil and Gas Sales $’000 581,374 564,367 3%
Other Revenue $’000 405,385 120,992 235%
Cost of Sales $’000 (290,839) (276,880) 5%
EBITDAW * $’000 640,774 245,096 161%
Profit before Tax $’000 321,613 90,587 255%
Net Profit after Tax (NPAT) $’000 260,398 63,732 309%
Normalised NPAT $’000 64,180 52,930 21%
Dividend Paid cps 1.75 1.75 0%
Dividend Announced cps 3.75 1.75 114%
Basic EPS cps 25.21 7.12 254%
CASH FLOwS
Operating Cash Flow $’000 173,256 199,803 (13)%
Investing Cash Flow $’000 (167,380) (11,776) (1,321)%
As at 30 June As at 30 June
Change
2009 2008
BALAnCE SHEET
Net Assets $’000 1,332,678 1,071,630 24%
Cash on Hand $’000 136,209 376,485 (64)%
Debt $’000 - 234,685 n/a
Debt/Debt+Equity 0.00% 17.97% n/a
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• Earnings Before Interest, Tax, Depreciation, Amortisation and asset Write downs

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“Beach Petroleum (BPT) has balance sheet strength and a long term production and
earnings profile superior to its mid–cap peers. We expect it will be looking to take
advantage of further corporate opportunities in the tough current environment to
provide growth beyond its organic projects.”
“BPT remains a value pick in a mid cap oil and gas sector that currently lacks good
value companies.”
—OLIVER FOSTER, EUROZ SECURITIES LIMITED, WEEKLY INFORMER, 31 AUGUST 2009
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BEACH : SHAREHOLDER REPORT : FINANCIAL YEAR ENDED 30 JUNE 2009 3

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KEY FINANCIAL
highlights
[continued]
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OiL AnD gAS SALES REVEnuE

EARningS

Earnings were exceptionally strong with earnings before interest, tax, depreciation, amortisation and writeoffs (EBITDAW) of $641 million as compared to $245 million in FY08, due principally to the gain on the sale of the Tipton West assets as well as foreign currency gains and smaller hedging losses.

Beach’s total sales revenue for FY09 increased by 3% to a record $581 million as compared to $564 million reported in FY08.

DiViDEnDS

Oil sales revenue was up $30 million due to higher production with the volume of oil sold increasing by 0.8 MMboe as a result of an increase in the Cooper Basin, in particular the Beach operated joint ventures.

During FY09, the directors announced and paid a 0.75 cent per share final dividend based on the half-year results for FY09. The directors also announced a 2.00 cent per share fully franked special dividend based on the successful sale of the Tipton West assets. This dividend had a record date of 31 August 2009 and a payment date of 30 September 2009. The directors are also pleased to announce a further partially franked final dividend payment of 1.00 cent per share based on the FY09 results.

The operations of the business provide a consistent picture, with gross profit recorded in FY09 of $293 million as compared to $303 million, down by 4%, mainly due to a smaller increase in stock as compared to the previous financial period. Operating expenses were in line with the prior period.

Whilst FY09 saw a drop in the oil price from an average of US$100 to US$69 per bbl, this was offset by a corresponding decline in the exchange rate from an average of US$0.90 to US$0.75, consequently resulting in an average realised oil price of A$93/bbl (before hedging adjustments) compared to A$111/bbl in the previous corresponding period. Gas and gas liquids sales revenue were down slightly by $18 million mainly due to a decline in gas sales volumes.

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A$m REVENUE
1100
1000
900
800
700
600
500
400
300
200
100
0
2006/07 2007/08 2008/09
Sales Revenue Total Revenue
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“BPT’s end of period net cash position of A$136 million was in line with our A$132 million forecast. As announced during the half, BPT has no outstanding interest bearing debt liabilities after receipt of funds from AOE for the sale of Tipton West.”

—BENJAMIN WILSON, J.P. MORGAN, 28 AUGUST 2009

4 BEACH : SHAREHOLDER REPORT : FINANCIAL YEAR ENDED 30 JUNE 2009

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nET PROFiT AFTER TAx (nPAT) ADJuSTED FOR COmPARiSOn wiTH THE FuLL yEAR RESuLTS FROm THE PREViOuS PERiOD

By adjusting the full-year profit to exclude the gain from asset sales, unrealised hedging and write-off adjustments, as per the table below, it can clearly be seen that the normalised profit for the group for the full-year reporting period at $64 million is 21% higher than the previous corresponding period of $53 million.

COMPARISON OF NORMALISED PROFIT Net Proft After Tax $’000	FY09	FY08 Movement from PCP 63,732 196,666
	260,398
Remove unrealised hedging (gains) / losses $’000	(50,045)	5,400 (55,445)
Remove close out of hedge book that does not relate to current fnancialperiod $’000	13,279	50,350 (37,071)
Remove asset sales $’000	(279,528)	(64,169) (215,359)
Remove asset write downs $’000	116,179	6,532 109,647
Remove realised foreign exchange on Egypt acquisition $’000	(43,911)	- (43,911)
Remove investment revaluations $’000	16,095	(14,186) 30,281
Tax impact of above changes $’000	56,100	4,822 51,278
Remove PRRT impact $’000	(24,387)	449 (24,836)
Normalised Net Proft After Tax $’000	64,180	52,930 11,250

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EARNINGS PER SHARE
254%
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kathryn Presser CHIEF FINANCIAL OFFICER 28 AUGUST 2009

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A$m PROFIT
300
250
200
150
100
50
0
2006/07 2007/08 2008/09
NPAT Normalised NPAT
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BEACH : SHAREHOLDER REPORT : FINANCIAL YEAR ENDED 30 JUNE 2009 5

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REVIEW OF
operations
Driven by a 25% increase in our Cooper Basin oil production, Beach achieved
record annual production during FY09 of 9.6 MMboe, up 3% on the previous
year. Average gas sales price increased by 7% above the previous year to
$4.33/GJ and average oil sales price, although down on the previous year’s record
high, remained at a historically high level of A$92.75/bbl. The combination of
record production and strong commodity prices resulted in record sales revenue
of $581 million.
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After strong growth in reserves for five years, our reserves have decreased this year to 66 MMboe, primarily as a result of the sale of our interest in the Tipton West assets to Arrow Energy Limited. This reduction was offset by reserves additions of 5.9 MMboe in the Cooper Basin and 2.2 MMboe in Egypt, the first reserves booked by Beach in that area.

Although the Tipton West sale removed 76 MMboe from reserves, this transaction is the culmination of a highly successful involvement in the project for Beach. After an initial investment of some $35 million in 2005, we saw our share of ultimate recoverable reserves grow from 70 PJ to 467 PJ. The sale was the final step in the efforts, over a four-year period, of Beach’s technical, commercial and financial teams who identified, acquired, managed and finally divested the asset, for consideration up to $400 million.

The Cooper Basin program during FY09 was highlighted by further success in the

prolific PEL 92 block where three further oil discoveries were made, complemented by two successful development wells in the Callawonga oil field and the commissioning of the Callawonga-Tantanna pipeline. Since Beach began exploring in this block in 2001, more than 7.1 MMbbl of oil (net to Beach) has now been discovered and 3.1 MMbbl (net) produced. The pipeline infrastructure now in place allows oil to be exported from the block at rates exceeding 6,000 bopd.

Elsewhere in the Cooper Basin two gas discoveries were made in PEL 106 and 31 gas development wells were drilled. Overall the Cooper Basin program added net reserves to Beach of 5.9 MMboe at an exploration cost of $5.25/boe and developed 5.7 MMboe at a cost of $16/boe.

Perhaps the most significant event during the year, from a longer–term perspective, was the first step in the quantification of the remaining gas resources in the Cooper Basin, with a net resource of more than 1,300 PJ identified in

only a portion of Beach’s assets in the Basin. One of the most important objectives for Beach is to commercialise a significant proportion of these resources in coming years. Our farmin to PEL 218, where exploration will be specifically directed towards gas in unconventional reservoirs, is indicative of Beach’s view of the significant remaining potential in Cooper Basin and the role it has to play in supplying energy to eastern Australia.

Our Egyptian projects progressed during the year on three fronts:

• Government approval was obtained for the development of the near-shore fields in the North Shadwan block in the Gulf of Suez. We are on track for first production by early 2010, about 18 months after acquisition of our interest in the block.

• Appraisal drilling of the Burtocal discovery was carried out in 2008. Further drilling is planned for FY10 with the aim of proving up reserves sufficient to commit to development next year.

6 BEACH : SHAREHOLDER REPORT : FINANCIAL YEAR ENDED 30 JUNE 2009

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• Exploration drilling was undertaken in the Southeast July block. Although the well was unsuccessful, we rate highly the remaining prospectivity in the block and expect further exploration drilling to be undertaken in FY11.

In summary, we are pleased with progress in Egypt during the year and are looking for opportunities to add to our portfolio in that region.

Our strategy is to maintain a balanced exposure to risk and reward across our exploration and development projects. The lower risk/reward portion of the portfolio is largely provided through our Cooper Basin activities, while the Gippsland Basin and Egyptian assets are predominately medium risk/ reward. The higher impact end of the portfolio is represented by our international projects in New Zealand, Spain, Albania and Tanzania, with the last representing the project with the highest potential reward for the company.

We are in the final stages of negotiating a Production Sharing Agreement (PSA) with the Tanzanian Government over Lake Tanganyika South, which has a similar geological setting to Lake Albert in Uganda where more than 600 MMbbl of oil has been discovered. Lake Tanganyika is truly a frontier area, with only limited 2D seismic having been acquired and no drilling undertaken. The Lake Tanganyika South PSA is approximately twice the size of the productive area in Lake Albert. A large natural oil seep in the northern part of the lake suggests that a working petroleum system is present in the permit area. We expect to finalise the PSA during FY10, which will provide Beach with tenure, at an initial 100% equity level, over an area with very significant long term potential.

In the forthcoming years we aim to continue to build and broaden our asset portfolio, while maintaining our balanced exposure to risk and reward and focussing on areas where we can utilise the substantial skill base in the Beach team.

The PEL 92 and Tipton West projects, in particular, demonstrate the ability of the Beach team to acquire and exploit assets, bringing material tangible financial benefits to the company. I have no doubt that the continued application of technical, commercial and fiscal rigour by the strong Beach team will yield continuing success.

Hector gordon CHIEF EXECUTIVE OFFICER 28 AUGUST 2009

BEACH : SHAREHOLDER REPORT : FINANCIAL YEAR ENDED 30 JUNE 2009 7

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REVIEW OF
operations
[continued]
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PRODuCTiOn

Beach produces oil, gas and gas liquids from numerous production joint ventures within the Cooper and Eromanga Basins. It also holds equity in the Basker Manta Gummy (BMG) Project within the Gippsland Basin and, until divestment in May 2009, held an interest in the Tipton West Coal Seam Gas project. During FY09 production tenements were granted within the North Shadwan area of Beach’s Egyptian Exploration tenements.

Beach’s production during FY09 was 9.6 MMboe, a new record for the company, with 8.2 MMboe produced from the Cooper Basin. Production was comprised of oil and gas liquids production of 11,267 boepd (43% of total) with gas production of 15,026 boepd.

AREA Net Production	AREA Net Production	AREA Net Production	AREA Net Production
Oil (MMbbl) Cooper & Eromanga Basins		FY09	FY08 2.0
		2.5
	Gippsland Basin	0.8	0.8
	Total Oil	3.3	2.8
Sales Gas (PJ)	Surat Basin	3.4	3.0
Sales Gas & Ethane (PJ)	Cooper Basin	28.0	30.0
LPG (kt)	Cooper Basin	52.0	55.0
Condensate (MMbbl)	Cooper Basin	0.4	0.4
Total Oil & Gas (MMboe)		9.6	9.3

RESERVES

Beach’s proved and probable hydrocarbon reserves as at 30 June 2009 were 66 MMboe, a decrease of 79 MMboe from 30 June 2008.

The reserve decrease is primarily associated with the divestment of gas reserves in the Tipton West field and the following adjustments: • Production of 9.6 MMboe.

• Reduction in reserves in the BMG project of 2.7 MMboe, and the recategorisation of these reserves as resources, following the failure of contract negotiations for a new Floating Production Storage and Offloading Vessel (FPSO).

• Reserve additions in the Cooper Basin of 5.9 MMboe arising from exploration success and reserves reassessments in existing fields.

• Reserve bookings for the undeveloped near-shore oil fields in the Egyptian North Shadwan Block following grant of development status.

Proved and Probable Reserves 30 June 2009	Proved and Probable Reserves 30 June 2009	Proved and Probable Reserves 30 June 2009	Proved and Probable Reserves 30 June 2009	Proved and Probable Reserves 30 June 2009
AREA Cooper/Eromanga Basin	Oil	Gas Liquids	Gas	Oil Equivalent
	**(MMbbl) **	(MMboe )	(PJ)	(MMboe )
	14.3	7.4	228	61
Gippsland Basin	2.4	-	-	2.4
Egypt	2.2	-	-	2.2
Total	18.8	7.4	228	66

BEACH : SHAREHOLDER REPORT : FINANCIAL YEAR ENDED 30 JUNE 2009

8

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COnTingEnT RESOuRCES

Beach has Contingent Resources totalling 293 MMboe, comprised as follows:

Contingent Resources (Most Likely or 2C) 30 June 2009	Contingent Resources (Most Likely or 2C) 30 June 2009	Contingent Resources (Most Likely or 2C) 30 June 2009	Contingent Resources (Most Likely or 2C) 30 June 2009	Contingent Resources (Most Likely or 2C) 30 June 2009
AREA Cooper Basin - Conventional	Oil (MMbbl)	Gas Liquids (MMboe )	Gas (PJ)	Oil Equivalent (MMboe )
	-	24.4	347	84
Cooper Basin - Unconventional	-	13.6	962	179
Other Resources	5.2	3.2	126	30
Total	5.2	41.2	1435	293

Cooper Basin conventional resources in the table above relate to hydrocarbons contained within existing conventional Cooper Basin gas reservoirs that are potentially economically recoverable through improvements in gas price or reduction in development cost. These resources relate to a review of four of the largest fields and are primarily associated with increasing recovery within existing hydrocarbon fields through the improved

application of existing development technology. Quantification of the improved recovery potential outside the four major fields has not yet been undertaken.

Cooper Basin unconventional resources relate to hydrocarbons contained

within existing unconventional Cooper Basin gas reservoirs, such as shale, coal and/or low permeability sandstone within the Roseneath, Epsilon, Murteree and Patchawarra

Formations of the Moomba and Big Lake Fields. These resources are being targeted with ongoing technical work.

Other resources are primarily composed of the resources associated with the expanded BMG Oil and Gas Development, but also include Beach’s share of resources in the Papuan, Carnarvon and Otway Basins and the Gulf of Suez.

BEACH : SHAREHOLDER REPORT : FINANCIAL YEAR ENDED 30 JUNE 2009 9

ExPLORATiOn & DEVELOPmEnT

CoopER/ERomANgA BAsIN

Beach holds widespread interests in the Cooper and Eromanga Basins of South Australia and Queensland. During the year Beach participated in the drilling of 70 wells in this region.

Key results of the FY09 program were:

• In PEL 92 (Beach 75%) three new oil fields were discovered and two successful wells were drilled in the Callawonga oil field, increasing 2P reserves in the block by 2.3 MMbbl (net to Beach).

• Two gas fields were discovered in PEL 106 (Beach Farmin Block) (Beach earning 50%).

• The quantification of Contingent Gas Resources of more than 1,300 PJ (net to Beach) within tenements held by the South Australian Cooper Basin Unit Joint Venture.

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10 BEACH : SHAREHOLDER REPORT : FINANCIAL YEAR ENDED 30 JUNE 2009

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gIppsLAND BAsIN (beach 30%)

Beach holds a 30% equity in the BMG oil and gas fields, offshore Victoria. This project presently involves oil production from three wells in the Basker field and one well in the Manta field, all of which are connected, via subsea connections to the “Crystal Ocean” FPSO. Separation of gas associated with the oil production is undertaken on the Crystal Ocean with excess gas reinjected into the Basker Field and oil transferred to a leased shuttle tanker.

Key events during FY09 were:

• Basker-6ST1 commenced production in September 2008 and the well commenced production at a stabilised initial rate of over 5,000 bopd.

• A development program consisting of two workovers (Basker-5 and Basker-3) and the drilling of the Basker-7 development well commenced in June 2009.

pApUA NEw gUINEA (beach 6.36%)

An 840 km[2] 3D seismic survey was acquired over the Pandora gas field in PRL-1 during November/December 2008. Results of the survey will be used to better define the Pandora Field gas resource.

TANzANIA

Beach has been granted exclusive rights, following a contested tender process, to negotiate with the Tanzanian Government to explore the waters and adjacent onshore area of the southern half of Lake Tanganyika, in western Tanzania. The final terms of a Production Sharing Agreement will be negotiated between Beach and the Tanzanian Government before work commences.

Lake Tanganyika forms part of the western arm of the 6,400-kilometre long East African Rift system. Exploration in the concession will target an oil exploration play analogous to that which is yielding significant success in the Rift system in Uganda.

ARRowIE BAsIN – pARALANA gEoThERmAL pRoJECT

Drilling commenced at Paralana-2 on 30 June 2009. The well is planned to be drilled to 4,000 metres to test the temperature and permeability of the sedimentary section below 3,400 metres. This well is the first stage in assessing commerciality of the hot rock resource in the region. Pending evaluation of the results, stimulation of the sedimentary section will be carried out to enhance permeability and a second well will be drilled to create an underground heat exchanger. If commercially viable, heat will be extracted from the subsurface by circulating water through fractures between the two wells. The extracted heat will then be used at the surface for power generation.

BEACH : SHAREHOLDER REPORT : FINANCIAL YEAR ENDED 30 JUNE 2009 11

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REVIEW OF
operations
[continued]
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ExPLORATiOn & DEVELOPmEnT - continued

EgYpT

North Shadwan Concession (beach 20%)

Government approval of the acquisition by Beach of a 20% interest in the North Shadwan concession was received in November 2008.

The North Shadwan Concession is operated by BP Exploration (Delta) Limited and contains three existing undeveloped oil discoveries and several attractive exploration prospects. Government approval has been granted to develop two of the NS377 and NS-385 fields which were discovered during the mid 1980s and are offshore but can be drilled from onshore and are estimated to contain recoverable oil reserves of 11 million barrels in Miocene sandstones. Development drilling is expected to commence in the second half of calendar year 2009 leading to commencement of production by early 2010.

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The third discovery (formerly NS394-1A and now named Burtocal) was made in late 2007. The discovery well penetrated a thick oil column within the Nubia Formation, an extremely prolific reservoir across the Gulf of Suez. During FY09 an appraisal drilling program was undertaken to test separate fault compartments in the Burtocal structure and to assist in delineating potential reserves. The sidetrack appraisal well NS394-2B encountered a gross oil column of at least 31 metres in good quality reservoir sands in the Nubia Formation. The well has been plugged and suspended for potential future re-entry as an oil production well. The results from exploration and appraisal drilling will be integrated into the ongoing evaluation of potential development options. One further well and a probable sidetrack will be drilled during the second half of calendar year 2009 in the North Burtocal area to test fault blocks north of the Burtocal oil discovery.

12 BEACH : SHAREHOLDER REPORT : FINANCIAL YEAR ENDED 30 JUNE 2009

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AUsTRALIA

EgYpT

No significant hydrocarbons were encountered and the well was plugged and abandoned.

Otway Basin (beach 67%)

South East July Concession (beach 20%)

Fermat-1 (Vic/P46) spudded on 13 December 2008 and after reaching a total depth of 3,585 metres was plugged and abandoned, having failed to discover significant hydrocarbons.

Government approval of the acquisition by Beach of a 20% interest in the South East July concession was received in November 2008.

Browse Basin (beach 7.34%)

Burnside-1, an exploration well targeting a large stratigraphic prospect in WA-281P in the Browse Basin (370km NNE of Broome), spudded on 15 June 2009. The well targeted the gas potential of lower Cretaceous sands at less than 50km to the southwest of the Ichthys gas field.

South July-1 spudded in late December 2008, targeting the Rudeis and Nubia Formations within a tilted fault block trap. The well reached a total depth of 3,927 metres in the Rudeis, Yusr Member sandstones. Due to a thicker than anticipated Lower Rudeis interval, the well did not reach the Nubia Formation, the second of its two primary reservoir targets. Hydrocarbon shows were encountered at the top of the Yusr Member and the well was sidetracked in order to evaluate the Yusr sands in a position up-dip of the original location. The sidetrack hole (South July-1ST) intersected the Yusr sands updip as predicted, however there were no significant hydrocarbons and the well was subsequently plugged and abandoned.

Bass Basin

Peejay-1 (T/39P, Beach earning 50%) was drilled in November 2008 to a total depth of 2,133 metres. No significant hydrocarbons were encountered and the well was plugged and abandoned.

Drilling of Burnside-1 has resulted in a gas discovery with the well encountering 65 metres of gas saturated, low permeability sandstone in the primary reservoir objective Brewster Sandstone. The well has been plugged and abandoned as planned and the result is being assessed by the joint venture.

The drilling rig then moved to the Spikey Beach-1 location in T/38P (Beach earning 80%). The rig was unable to safely jack-up due to unsuitable sea floor conditions. Consequently, Spikey Beach-1 was drilled in September 2009, using a semi-submersible rig.

“We believe exploration success and progress with the development of the North Shadwan fields are the next events to keep an eye on and that BPT still offers appealing value.”

—RBS EQUITIES (AUSTRALIA) LTD, 28 AUGUST 2009

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BEACH : SHAREHOLDER REPORT : FINANCIAL YEAR ENDED 30 JUNE 2009 13

~~REVIEW OF~~ ~~operations~~ [continued] DRILLINg pRogRAm The drilling program for the year comprised 75 wells, of which 70 were drilled in the Cooper Basin, with one well being drilled in each of the Gippsland and Taranaki Basins. ExPLORATiOn & DEVELOPmEnT_- continued_ AREA Category Wells drilled Successes Success Rate COOPER/EROmAngA Exploration - Oil 8 6 75% Exploration - Gas 2 2 100% Appraisal & Devl’t - Oil 29 21 72% Appraisal & Devl’t - Gas 31 31 100% Total Cooper 70 60 86% OFFSHORE AuSTRALiA Exploration - Oil 1 0 0% Exploration - Gas 2 1 50% EgyPT Exploration - Oil 1 0 0% Appraisal & Devl’t - Oil 1 1 100% Total 75 62 83% “The result was a good one for BPT, outperforming most of its peers by recording earnings growth in a tough year. We are forecasting earnings growth again this year.” —OLIVER FOSTER, EUROZ SECURITIES LIMITED WEEKLY INFORMER, 31 AUGUST 2009	~~REVIEW OF~~ ~~operations~~ [continued] DRILLINg pRogRAm The drilling program for the year comprised 75 wells, of which 70 were drilled in the Cooper Basin, with one well being drilled in each of the Gippsland and Taranaki Basins. ExPLORATiOn & DEVELOPmEnT_- continued_ AREA Category Wells drilled Successes Success Rate COOPER/EROmAngA Exploration - Oil 8 6 75% Exploration - Gas 2 2 100% Appraisal & Devl’t - Oil 29 21 72% Appraisal & Devl’t - Gas 31 31 100% Total Cooper 70 60 86% OFFSHORE AuSTRALiA Exploration - Oil 1 0 0% Exploration - Gas 2 1 50% EgyPT Exploration - Oil 1 0 0% Appraisal & Devl’t - Oil 1 1 100% Total 75 62 83% “The result was a good one for BPT, outperforming most of its peers by recording earnings growth in a tough year. We are forecasting earnings growth again this year.” —OLIVER FOSTER, EUROZ SECURITIES LIMITED WEEKLY INFORMER, 31 AUGUST 2009
	COOPER/EROmAngA Exploration - Oil 8 6 75%
	Exploration - Gas 2 2 100%
	Appraisal & Devl’t - Oil 29 21 72%
	Appraisal & Devl’t - Gas 31 31 100%
	Total Cooper 70 60 86%
	OFFSHORE AuSTRALiA Exploration - Oil 1 0 0%
	Exploration - Gas 2 1 50%
	EgyPT Exploration - Oil 1 0 0%
	Appraisal & Devl’t - Oil 1 1 100%
	Total 75 62 83%
	“The result was a good one for BPT, outperforming most of its peers by recording earnings growth in a tough year. We are forecasting earnings growth again this year.” —OLIVER FOSTER, EUROZ SECURITIES LIMITED WEEKLY INFORMER, 31 AUGUST 2009

“The result was a good one for BPT, outperforming most of its peers by recording earnings growth in a tough year. We are forecasting earnings growth again this year.”

—OLIVER FOSTER, EUROZ SECURITIES LIMITED WEEKLY INFORMER, 31 AUGUST 2009

14 BEACH : SHAREHOLDER REPORT : FINANCIAL YEAR ENDED 30 JUNE 2009

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HSE
snapshot
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FY09 was a significant year in the development of the Beach Health, Safety and Environment (HSE) system. With increased production activities continuing in the existing fields and the expansion of facilities, Beach’s HSE system has continued to develop and improve to meet the needs of employees and contractors.

Beach has increased its usage of lead indicators in operational HSE objectives. These indicators measure actions such as response time to mitigating identified hazards, number of emergency response drills conducted and quality of safety critical documentation such as permit to work and risk assessments. Beach also understands the importance of ensuring our employees have the necessary skills to perform their duties safely and has undertaken various HSE related training and competency assessments. Our supervisors are also undertaking a 12 month leadership development program to ensure that they continue to develop as leaders and continue to provide effective leadership and management at our sites.

HSE CASE STuDy

pRoDUCTIoN: AImINg FoR Low sUpERvIsIoN

Beach has always operated in accordance with good oilfield practice with sound systems and processes and has recently demonstrated this to Primary Industries and Resources SA (PIRSA) by way of a Fitness for Purpose assessment of its operations in accordance with the petroleum regulations.

Beach however wishes to achieve the highest level of operating / HSE excellence available under the South Australian Petroleum Act by submitting its HSE systems to PIRSA for accreditation under the “Low Supervision” category.

Low Supervision is achieved when PIRSA has confidence in the operating capabilities of the company with a significant weighting placed on the HSE system. Beach has already achieved Low Supervision status for its drilling operations and, with the continued expansion of its production operations and capabilities, is of a size to do so in production as well. Low Supervision also

demonstrates that the HSE system is mature enough to manage all aspects of the operation relating to HSE. It is important to note that this does not mean that Beach reduces its focus on HSE but rather recognises that Beach has a solid foundation from which to continue to develop, improve and self regulate.

Beach is on target to be a Low Supervision operator in the Cooper Basin by early 2010, with the Fitness For Purpose assessment in its final stages of validation by PIRSA. With further enhancements of the HSE system near completion, shareholders can be confident that Beach has the right tools to continue to operate in a safe and environmentally sound manner.

SAFETy wiLL TAkE PRECEDEnCE in ALL OPERATiOnS

BEACH : SHAREHOLDER REPORT : FINANCIAL YEAR ENDED 30 JUNE 2009 15

REG NELSON ~~awarded industry honour~~

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The Australian Petroleum Production & Exploration Association has awarded the Reg Sprigg medal for outstanding service to the industry to Beach Managing Director Reg Nelson.

Among other awards given at the Australian Petroleum Production & Exploration Association (APPEA) Conference & Exhibition in June 2009,

Reg Nelson took home the medal named after his former mentor, Reg Sprigg, the founder of Beach.

APPEA Chairman Eric Streitberg presented the award, paying tribute to Mr Nelson’s lifetime involvement in, contribution to, and significant success in Australia’s oil and gas industry.

“Reg Nelson is a giant and a true gentleman of our industry. He is a sought after industry expert and a highly successful business leader who inspires everyone around him to share his passion for exploring and achieving the full potential of Australia’s oil and gas industry,” said Mr Streitberg.

“Reg’s contribution has not been limited to his business activities; during his career he advanced the development and success of the industry as a whole through his involvement with APPEA. He was elected a councillor of APPEA in 2001 and served as Chairman from 2004–06. His success advocating key industry issues to government, owes much to his co-operative, statesman-like approach,” he said.

In his acceptance speech Reg explained the connection between himself and his late and former mentor Reg Sprigg, “Arkaroola was the field laboratory for the famous geologist and Antarctic explorer, Sir Douglas Mawson and his students in the 1930s and 1940s. One of those was a brash, opinionated and brilliant student called Reg Sprigg. Arkaroola so enraptured Reg Sprigg that in the late 1970s – when he was in his fifties – he threw caution – and potentially the family fortune to the wind and bought the property to set up what these days we’d call eco-tourism.”

“Late in the 1960s, to clear my brain, I went camping in the Northern Flinders Ranges and came back via Arkaroola – down an old camel pad from the

Yudnamutana mines. The Sprigg family had just bought the old sheep station. I think that’s where I really began to grasp an understanding of geology and the fluidity of rocks.”

“Having chosen the path of geology, not surprisingly, I touched base with Reg many times over the next 20 years - and in particular his connection with Beach Petroleum and its activities.”

“I can say that at APPEA, in 1991, here in Darwin, on the Esplanade, I was shanghaied by Reg and his wife, Griselda. That moment was yet another Sprigg catalyst that resulted in a change in my direction. Thus it was then when the newly elected board of Beach Petroleum was seeking another independent director, I agreed to leave a very secure and quite senior position with the South Australian Mines Department and launch into uncharted waters.”

“Overtime we rebuilt Beach into a substantial company. Let me stress, this was achieved by a dedicated team of people sharing the same personal risks. To me, this award is as much for them as for me”, Reg emphasised as he accepted the medal.

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Registered Office 25 Conyngham Street GLENSIDE SA 5065

ACN 007 617 969 ABN 20 007 617 969

Telephone (08) 8338 2833 Facsimile (08) 8338 2336

Share Registry - South Australia Computershare Investor Services Pty Ltd Level 5, 115 Grenfell St ADELAIDE SA 5000 Telephone: (08) 8236 2300 Facsimile: (08) 8236 2305

Securities Exchange Listing

Beach Petroleum Limited shares and options are listed on the Australian Securities Exchange Limited (ASX Code: Shares: BPT) (ASX Code: Bonus Options: BPTO) 91 King William Street ADELAIDE SA 5000

info@beachpetroleum.com.au www.beachpetroleum.com.au

BEACH : SHAREHOLDER REPORT : FINANCIAL YEAR ENDED 30 JUNE 2009

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