BEACH ENERGY LIMITED — M&A Activity 2009

Jul 22, 2009

Level 8 l 16 Spring Street l Sydney NSW 2000 P l +61 2 9241 4440 F l +61 2 9241 4404 E l admin@drillsearch.com.au W l www.drillsearch.com.au

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23 July 2009

Manager of Company Announcements ASX Limited Level 6, 20 Bridge Street SYDNEY NSW 2000

Takeover bid for Drillsearch Energy Limited by Beach Petroleum Limited – Fifth Supplementary Target’s Statement

Please find enclosed, in accordance with section 647(3)(b) of the Corporations Act 2001 (Cth), Drillsearch Energy Limited’s fifth supplementary target’s statement dated 23 July 2009 ( Fifth Supplementary Target’s Statement ).

The Fifth Supplementary Target’s Statement has been lodged with the Australian Securities & Investments Commission and Beach Petroleum Limited today.

For and on behalf of the Board

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Ian Bucknell Company Secretary

About Drillsearch Energy Limited (ASX: DLS), which listed on ASX in 1987, explores and develops conventional oil and gas projects. Drillsearch Energy merged with Great Artesian Oil and Gas (ASX: GOG) in 2008. The merged group has a strategic spread of petroleum exploration and production acreage in Australia’s most prolific onshore oil and gas province, the Cooper/Eromanga Basins in South Australia and Queensland, as well as offshore exploration in the Carnarvon and Gippsland Basins. Drillsearch also has interests in PNG and Canada. The Company’s focus is on ‘brownfields’ exploration where geological risk is reduced and there is access to existing infrastructure, ensuring that any discoveries can be brought into production.

ABN l 73 006 474 844

Level 8 l 16 Spring Street l Sydney NSW 2000 P l +61 2 9241 4440 F l +61 2 9241 4404 E l admin@drillsearch.com.au W l www.drillsearch.com.au

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Fifth Supplementary Target’s Statement

About this document

This document is the fifth supplementary target’s statement issued by Drillsearch Energy Limited ABN 73 006 474 844 ( Drillsearch ) under section 644 of the Corporations Act 2001 ( Fifth Supplementary Target’s Statement ) in relation to the off-market takeover offer made by Beach Petroleum Limited ABN 20 007 617 969 ( Beach ) to acquire the ordinary shares in Drillsearch.

This Fifth Supplementary Target’s Statement supplements and is to be read together with Drillsearch’s original target’s statement dated 30 June 2009, Drillsearch’s supplementary target statement dated 2 July 2009, Drillsearch’s second supplementary target’s statement dated 3 July 2009, Drillsearch’s third supplementary target’s statement dated 6 July 2009 and Drillsearch’s fourth supplementary target’s statement dated 13 July 2009.

Shareholder communiqué

Attached is a recent communiqué to Drillsearch shareholders from the Drillsearch Board.

ASIC lodgement

A copy of this Fifth Supplementary Target’s Statement was lodged with the Australian Securities & Investments Commission ( ASIC ) on 23 July 2009. Neither ASIC nor any of its officers takes any responsibility for the contents of this Fifth Supplementary Target’s Statement.

Defined terms

Unless the context requires otherwise, words defined in this Fifth Supplementary Target’s Statement have the same meaning as given to those terms in section 12.1 of the Original Target’s Statement.

Forward looking statements

This Fifth Supplementary Target’s Statement contains various forward-looking statements. Shareholders should note that those forward-looking statements are inherently subject to uncertainties in that they may be affected by a variety of known and unknown circumstances, variables and factors which could cause actual values or results, performance or achievements to differ materially from anticipated results, implied values, performance or achievements express or implied in those forward-looking statements. Many of these risks are identified in the Original Target’s Statement. Drillsearch does not give any assurance that the anticipated results, performance or achievements expressed or implied in those forward-looking statements will be achieved. You should not place undue reliance on any forward-looking statements.

Director’s authorisation

This Fifth Supplementary Target’s Statement has been approved by a resolution passed by the Directors.

Date

This Fifth Supplementary Target’s Statement is dated 23 July 2009 which is the date on which it was lodged with ASIC.

SIGNED for and on behalf of Drillsearch by Jim McKerlie who is authorised to sign this Fifth Supplementary Target’s Statement on behalf of the Company.

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Jim McKerlie

Chairman Drillsearch Energy Limited

Level 8 l 16 Spring Street l Sydney NSW 2000 P l +61 2 9241 4440 F l +61 2 9241 4404 E l admin@drillsearch.com.au W l www.drillsearch.com.au

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Dear Shareholder,

Drillsearch Is Your Company

We know you have been receiving lots of letters lately in relation to the hostile takeover by Beach for Drillsearch. We regret adding to this, but as Beach has made claims that are false and misleading we are compelled to respond to it. The unanimous recommendation of the board is to reject Beach’s opportunistic and undervalued offer. This letter addresses the most recent claims from Beach.

The facts are very simple and Beach is just confusing and misleading our shareholders. Please consider:

• Cash Position - Drillsearch will be lodging its quarterly cash report this week which will show an improvement in net outflows compared with the two previous quarters. The Beach claim that our cash position has “seriously eroded” is simply FALSE.

• Independently Assessed Reserves and Resources - We recently released an Independent Technical Expert’s Report which detailed some of our key reserves and resources. Beach continues to criticise Drillsearch but is still trying very hard to take us over to get access to these assets.

• Shareholder Loyalty - The loyalty of Drillsearch shareholders and their belief in our future is evidenced by the 93% of all shareholders who have NOT ACCEPTED the Beach offer. Only 435 out of a total of around 6,000 Drillsearch shareholders have accepted the offer.

• Bid May Be Less Than Market - The implied value of the offer may be less than the current market price of Drillsearch shares.

• Oil Prospects - Drillsearch has high expectations for the long term prospects of its exploration program in PEL 91 with the first two wells, Chiton-1 and Marino-1, about to be drilled. Beach has already recorded significant drilling success in neighbouring PEL 92 as has Victoria Petroleum in the adjacent PEL104. PEL 91 lies right in the centre of the Cooper Basin Western Flank oil fairway.

• Gas Commercialisation Project - Drillsearch is also planning exploration and development wells in coming months in PEL 106, where significant 2C Contingent Resources have been discovered. Drillsearch recently announced that the PEL 106 wells Brownlow-1 and Canunda-1 were completed for production, highlighting our favourable expectations in this region. Gas commercialisation is a management priority.

• Oil Price Up - The Tapis oil price is up almost 40% since Beach announced its offer, but the implied value of its bid has increased by only around 4%.

• Potential Upside - Drillsearch’s loyal shareholders deserve to participate in the enormous potential that was highlighted by the Managing Director’s strategic review. Why give this away to Beach which knows and understands very well the true value of Drillsearch shares?

To reject the Beach offer, do nothing. If you have any enquires contact Brad Lingo on 02 9241 4440 or visit our website (www.drillsearch.com.au) for the latest announcements.

Jim McKerlie Chairman jim.mckerlie@drillsearch.com.au

Brad Lingo 23 July 2009 Managing Director brad.lingo@drillsearch.com.au