One of the richest on-land energy reserves in Australia is the Cooper Basin; a 130,000-square-km area spread across northern South Australia and into the South of Queensland. Not surprisingly it is boasts a significant number of oil and gas discoveries. By mid-May this year that number was up to 283 according to figures from the government of South Australia.
However Beach Energy (ASX: BPT) has pushed the figure to new heights after announcing four new oil discoveries in blocks it has been drilling in conjunction with joint venture partners Drillsearch Energy (ASX: DLS) and Cooper Energy (ASX: COE).
The discoveries are across two separate blocks Beach has been exploring, known as PEL 91 and PEL 92. The three discoveries in PEL 91 hit gross oil pays of 8 meters, 6 meters and 11 meters respectively, while PEL 92 encountered a gross oil column of 7 meters. All four discoveries have been cased and suspended as potential future production wells after follow up appraisals are completed.
The discoveries are highly positive for Beach which has seen its share price languishing this year, down almost 23% since January. It also represents a doubling of the company’s success rate in drilling; a fact that ensures capital is not wasted drilling dry wells.
Beach Energy Managing Director Reg Nelson says the recent exploration success is the result of newly acquired 3D seismic data. In the company’s media release Mr. Nelson is quoted saying:
“The subsequent analysis of the prospects and leads generated from this 3D data is reflected in the success rate of oil exploration wells increasing from around 25 % on 2D seismic, to almost 50% on 3D.”
This increased success rate will make Beach more attractive as a potential partner in new joint ventures with some of the biggest names in energy exploration and production. Beach is already working closely with Santos (ASX: STO) and Origin Energy (ASX: ORG), companies big enough to fund large chunks of any infrastructure that may be required for production wells.
A proven track record of production and a higher success rate of drilling new wells will make Beach Energy attractive for both investors and potential joint venture partners on new projects. With a share price down close to 23% this year, all eyes will be on Beach to see if the company can capitalize on these new opportunities.
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Motley Fool contributor Regan Pearson does not own shares in any of the companies mentioned in this article.