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Beach Energy Egyptian Expansion

Beach Energy Limited is pleased to report on additions to its Egyptian exploration portfolio and corresponding expansion of its exploration program for 2010 and 2011. Beach Petroleum (Egypt) Pty Ltd (Beach), a wholly owned subsidiary of Beach Energy Limited, has executed Sale and Purchase Agreements with Kuwait Energy Company through which Beach will, subject to Egyptian regulatory authority approval and endorsement, acquire equity in two highly prospective onshore Egypt concessions; a 22% interest in the Abu Sennan Concession in the Western Desert and a 15% interest in the Mesaha Area Concession in southern Egypt. The acquisitions, which includes an undeveloped oil discovery, represents a total investment (subject to firm and contingent work programmes) of up to US$33 million by Beach over the next two years. The Western Desert has been the site of significant exploration success in recent years with the application of 3D seismic technology. The Abu Sennan Concession (300km west of Cairo) covers approximately 1600km2 and 3D seismic has recently been acquired over the entire permit. The block contains many attractive oil prospects, four of which the Egyptian regulatory authorities have already approved for drilling. The Operator will work with the regulatory authorities to get approval for an additional ten wells. The first drilling campaign is due to start within two months and run for up to twelve months. Each prospect has reservoir targets at multiple horizons; the shallowest are proven in the block at the GPZZ oil discovery. The drilling program will commence with appraisal drilling of this discovery to establish reserve size. Deeper targets, with the potential for significant field additions (tens of millions of barrels of oil equivalent) from highly productive reservoirs, have been successfully explored in neighbouring concessions (refer map above). The Mesaha Concession is located in southern Egypt on the Sudanese border and covers approximately 57,000km2. Exploration in the area is at an early stage and will focus on the northsouth trending Mesaha Graben, a basin previously delineated using aero-magnetic and gravity surveys. A regional 2D seismic program is currently being acquired to determine its extent and depth. The part of the Mesaha Graben which is located in the Mesaha Concession is larger than the Gulf of Suez and is interpreted to have over 4000 metres of Palaeozoic and Mesozoic sediment with good source and reservoir rocks analogous to highly productive basins south of the concession. After analysis of the regional seismic, a further 2D seismic program is anticipated to be acquired with the aim of defining potential drilling opportunities. The effective dates of the transactions will be 1 January 2010. Following completion of the acquisitions, subject to waiver of pre-emption rights by Joint Venture parties and approvals by the Egyptian regulatory authorities. For more information contact Corporate Reg Nelson / Hector Gordon Beach Energy Limited 08 8338 2833 Investor Relations Steve Masters / Nicola Frazer Beach Energy Limited 08 8338 2833 Media Ian Howarth Collins Street Media 03 9223 2465.