BEACH ENERGY LIMITED — M&A Activity 2009

May 14, 2009

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Friday 15 May 2009

MEDIA RELEASE FOR IMMEDIATE RELEASE

Ref: #057/09

BEACH BIDDER'S STATEMENT OFFERS BALANCE SHEET STRENGTH FOR DRILLSEARCH SHAREHOLDERS

Beach Petroleum Limited ("Beach," ASX:BPT) today lodged its Bidder's Statement offering to acquire all of the shares in junior oil and gas producer Drillsearch Energy Limited (“Drillsearch,” ASX:DLS).

Under the terms of the offer, Beach is offering Drillsearch shareholders one Beach share for every 27 Drillsearch shares held (one-for-27). This ratio was calculated on a three month volume weighted average price (“VWAP”) basis for both Drillsearch and Beach and represents a 21% premium to Drillsearch’s closing price on the date of the bid announcement on 5 May 2009.

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• The scrip offer by Beach values a Drillsearch share at three cents ($0.03), a premium of 50.0% to the Drillsearch three month VWAP.

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• Beach has entered into pre-bid agreements with a number of Drillsearch's shareholders and, as a result, together with its existing shareholding, now holds a relevant interest of 13.2% of Drillsearch.

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• Beach’s offer presents an opportunity for balance sheet strength, management cohesiveness and liquidity to Drillsearch shareholders at a time when all these assets are lacking at Drillsearch.

25 Conyngham Street, Glenside South Australia 5065 GPO Box 175 Adelaide 5001 Telephone (618) 8338 2833 Facsimile (618) 8338 2336 Beach Petroleum Ltd ABN 20 007 617 969 www.beachpetroleum.com.au

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Acquisition Rationale

Beach Petroleum’s bid for Drillsearch

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• Provides an opportunity to develop Drillsearch’s assets through the financial strength of Beach at a time when raising exploration funds for small capitalised companies is difficult. Beach has a strong balance sheet, Drillsearch does not.

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• Would entrust the Drillsearch assets to a very reputable management team with a sound track record of developing and growing oil and gas assets. Beach has a strong management team. Drillsearch currently has no Managing Director and a Board that appears to be in disarray.

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• Would consolidate permit ownership interests in the Cooper Basin and deliver greater efficiencies, in Beach's view. Beach is an experienced operator of Cooper Basin Assets.

Why Drillsearch Shareholders should accept the Beach offer:

The Beach offer gives Drillsearch shareholders the opportunity to exchange their Drillsearch shares at a significant premium to their current value, for shares in what Beach believes to be a larger, more secure company with high quality assets and experienced and stable management.

Attractive offer price

Beach’s Offer represents a 50% premium to the three month average price for Drillsearch shares.

Step up to a larger company

Beach is an S&P/ASX 200 listed company and is a significant Australian oil and gas producer.

Recognised growth potential

Analysts from a number of larger investment banks believe that Beach’s share price has the potential to increase.

Greater financial strength

Compared with Drillsearch, Beach has a substantially stronger balance sheet and has proven it can generate consistently strong cashflows.

Solid management with a track record of success

Beach has a stable Board with a record of continuity and a sound track record of developing and growing oil and gas assets.

Exposure to diverse asset portfolio

Beach has a diversified exploration and production portfolio across a range of geographical regions offering greater opportunity for discoveries.

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Consolidation of ownership

Beach and Drillsearch hold a number of Cooper Basin assets in common. Combining management of these assets should yield greater efficiencies.

Improved share liquidity

Beach traded approximately 5 times as many shares as Drillsearch in the 12 months prior to the bid announcement, based on the relative number of issued shares.

A history of regularly paying dividends

Drillsearch does not pay dividends. Beach has paid two dividends per year since 2002.

Conditions of the Offer

Beach’s offer has, among others, the following conditions:

• (a) Beach achieving acceptances from Drillsearch shareholders totalling at least 90% of the company’s shares, and

• (b) Drillsearch not issuing shares to any party other than 60 million shares to CPC Energy Limited in relation to the acquisition by Drillsearch of an equity interest in this company's 'Tintaburra Block' (ATP 299P).

Advisors

Beach has engaged Adelaide Equity Partners Limited as corporate and financial advisor and Piper Alderman as legal advisor to the transaction.

The Bidder's Statement provides a comprehensive explanation of the offer and the significant benefits that Beach believes that all shareholders in both Beach and Drillsearch can gain by supporting the bid. The Statement can be viewed online at www.asx.com.au or www.beachpetroleum.com.au.

The Bidder's Statement - unless the target agrees to earlier dispatch - is required to be mailed directly to all Drillsearch shareholders within 14 to 28 days, at which point the offer will be open to acceptance. The offer will remain open for at least a month.

For further information please contact:

Reg Nelson/Hector Gordon Ian Howarth Mark Lindh

Beach Petroleum 08 8338 2833 Farrington National 0407 822 319 Adelaide Equity 0414 551 361