BEACH ENERGY LIMITED — Capital/Financing Update 2012

Apr 3, 2012

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4 April 2012

Dear Shareholder,

Beach Energy Limited's Entitlement Offer - Notification to Ineligible Retail Shareholders

This letter is to inform you that, unfortunately, you are not eligible to participate in the Retail Entitlement Offer (defined below). You are not required to do anything in response to this letter.

On 27 March 2012, Beach Energy Limited ( Beach ) announced that it was conducting an equity raising of approximately $195 million in new Beach ordinary shares ( New Shares ), through an accelerated non-renounceable pro rata entitlement offer ( Entitlement Offer ) at the offer price of $1.40 per New Share.

The Entitlement Offer is being made by Beach in accordance with section 708AA of the Corporations Act 2001 (Cth) as modified by ASIC Class Order 08/35.

The Entitlement Offer allows eligible shareholders to subscribe for one New Share for every eight existing Beach ordinary shares held as at 7.00pm (Adelaide time) on 30 March 2012 ( Record Date ).

The Entitlement Offer comprises an institutional component ( Institutional Entitlement Offer ) and a retail component ( Retail Entitlement Offer ). The Institutional Entitlement Offer raised approximately $117 million, and the Retail Entitlement Offer will raise approximately $78 million. The Entitlement Offer is fully underwritten.

Documents relating to the Retail Entitlement Offer were lodged with ASX on 4 April 2012 and are being mailed to Eligible Retail Shareholders, as defined below.

This letter is not an offer to issue New Shares to you, nor an invitation for you to apply for New Shares.

Why am I not eligible to participate in the Retail Entitlement Offer?

Shareholders who are eligible to participate in the Retail Entitlement Offer ( Eligible Retail Shareholders ) are those persons who:

• a) are registered as a holder of Beach ordinary shares as at the Record Date;

• b) have a registered address on the Beach register of members in Australia or New Zealand;

25 Conyngham St, Glenside South Australia 5065 GPO Box 175 Adelaide 5001 Telephone (61 8) 8338 2833 Facsimile (61 8) 8338 2336 Beach Energy Limited ABN 20 007 617 969 Website: www.beachenergy.com.au

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• c) are not in the United States and are not a U.S. Person and are not acting for the account or benefit of a US Person;

• d) were not invited to participate (other than as nominee in respect of other underlying holdings) under the Institutional Entitlement Offer, and were not treated as ineligible institutional investors under the Institutional Entitlement Offer; and

• e) are eligible under all applicable securities laws to receive an offer under the Retail Entitlement Offer.

Beach has determined, pursuant to 9A(3)(a) of the Corporations Act 2001 (Cth) and Listing Rule 7.7.1(a) of the ASX Listing Rules, that it would be unreasonable to make offers to shareholders in countries outside Australia and New Zealand in connection with the Retail Entitlement Offer.

The securities laws of many countries require the use of offer documents specific to that country or compliance with local laws for the Retail Entitlement Offer to be made in those countries. Having regard to the number of retail shareholders in particular countries, the number and value of Beach ordinary shares to which those shareholders would otherwise be entitled and the potential cost of compliance with local laws to make the Retail Entitlement Offer in those countries, Beach has limited the countries in which the Retail Entitlement Offer will be made.

Unfortunately, according to our records, you do not satisfy the eligibility criteria for an Eligible Retail Shareholder stated above.

Accordingly, in compliance with ASX Listing Rule 7.7.1(b), Beach wishes to advise you that it will not be extending the Retail Entitlement Offer to you and you will not be able to subscribe for New Shares under the Retail Entitlement Offer. You will not be sent the documents relating to the Retail Entitlement Offer.

If you have any questions in relation to any of the above matters, please contact Beach's share registry on +61 3 9415 4659 from 8:30am to 4:30pm (Adelaide time) Monday to Friday.

For other questions, you should consult your stockbroker, accountant, solicitor or other independent professional adviser.

As an ineligible retail shareholder you are not required to do anything in response to this letter.

On behalf of the directors and management of Beach, we regret that you are not eligible to participate in the Retail Entitlement Offer and thank you for your continued support.

Yours sincerely,

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Bob Kennedy Chairman

This document does not constitute an offer to sell, or a solicitation of an offer to buy, New Shares in the United States. The entitlements and the New Shares have not been, and will not be, registered under the U.S. Securities Act of 1933 ( U.S. Securities Act ) or the securities laws of any state or other jurisdiction of the United States. The entitlements may not be taken up by persons in the United States or by persons who are, or are acting for the account or benefit of, a person in the United States. The New Shares may not be offered or sold in the United States or to, or for the account or benefit of, a person in the United States, except in transactions exempt from, or not subject to the registration requirements of the U.S Securities Act and the applicable securities laws of any state or other jurisdiction of the United States.

The provision of this notice is not, and should not be considered as, financial product advice. The information in this notice is general information only, and does not take into account your individual objectives, taxation position, financial situation or needs. If you are unsure of your position, please contact your stockbroker, accountant, solicitor or other independent professional advisor.

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