oil production operations -...

2006 ANNUAL REPORT

ON

OIL PRODUCTION OPERATIONS

IN

PPL 204 ( Sellicks ) PPL 205 ( Christies ), and PPL 210 ( Aldinga ) PPL 212 ( Kiana )

IN THE

COOPER BASIN, SOUTH AUSTRALIA

December 31 , 2006

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CONTENTS Introduction

• Annual Report for PPL 204 ( Sellicks Field )

1. Summary of Regulated Activities Undertaken

2. Compliance Report

3. Audits

4. Reports and Data

5. Incidents

6. Foreseeable threats

7. Operations Proposed for 2007

8. Estimated Production for 2007

9. Proposed Development Activities

10. Expenditure on Regulated Activities

• Annual Report for PPL 205 ( Christies Field )



3. Audits

4. Reports and Data

5. Incidents







• Annual Report for PPL 210 ( Aldinga Field )



3. Audits

4. Reports and Data

5. Incidents






• Annual Report for PPL 212 ( Kiana Field )



3. Audits

4. Reports and Data

5. Incidents







APPENDICES Sellicks and Christies Fields

I. Statement of Expenditure on the production operations at the Sellicks and Christies fields.

II. List of Reports submitted to PIRSA relating to the production operations at the

Sellicks and Christies fields.

III. Compliance Report for the production operations at the Sellicks and Christies fields.

IV. Spreadsheet summarizing the compliance that was achieved by the development

drilling operations at the Sellicks and Christies fields with each of the objectives listed in the “Cooper Basin Drilling SEO.”

V. Spreadsheet summarizing the compliance that was achieved by the production

operations at the Sellicks and Christies fields with each of the objectives listed in Beach Petroleum’s Production SEO.

Aldinga Field

VI. Statement of Expenditure for the production operations at the Aldinga field. VII. List of Reports submitted to PIRSA relating to the production operations at the

Aldinga field.

VIII. Compliance Report for the production operations at the Aldinga field.

IX. Spreadsheet summarizing the compliance that was achieved by the production operations at the Aldinga field with each of the objectives listed in Beach Petroleum’s Production SEO.

Kiana Field

X. Statement of Expenditure for the production operations at the Kiana field. XI. List of Reports submitted to PIRSA relating to the production operations at the Kiana

field.

XII. Compliance Report for the production operations at the Kiana field.

XIII. Spreadsheet summarizing the compliance that was achieved by the development drilling operations at the Kiana field with each of the objectives listed in the “Cooper Basin Drilling SEO.”

XIV. Spreadsheet summarizing the compliance that was achieved by the production operations at the Kiana field with each of the objectives listed in Beach Petroleum’s Production SEO.


Introduction As at December 31st, 2006, Beach Petroleum operates four Petroleum Production Licences in the South Australian Cooper Basin, with a further four fields operating under Extended Production Test. PPL 204 was granted to Beach Petroleum and its partner, Cooper Energy, on September 11, 2003 to authorize ongoing oil production from the Sellicks field. Oil production commenced at the Christies field on 9th October 2003 as Extended Production Testing of the Christies-1 well. PPL 205 was subsequently granted to Beach Petroleum and its partner, Cooper Energy twelve months later, on October 11th, 2004, to authorize ongoing oil production from the Christies field. Oil production commenced at the Aldinga field on 16th April 2003 as Extended Production Testing of the Kiana-1 well. PPL 210 was subsequently granted to Beach Petroleum and its partner, Magellan Petroleum, eighteen months later, on December 23rd, 2004, to authorize ongoing oil production from the Aldinga field. Oil production commenced at the Kiana field on 21st December 2005 as Extended Production Testing of the Kiana-1 well. PPL 212 was subsequently granted to Beach Petroleum and its partners, Magellan Petroleum and Great Artesioan Oil and Gas, one month later, on 23rd January, 2006 to authorize ongoing oil production from the Kiana field. This Annual Report covers the operations at each of these four fields for the twelve months from January 1st, 2006 until December 31, 2006. During this period, PIRSA granted Beach approval to undertake Extended Production Testing at four new discovery wells, Silver Sands-1 ( PEL 92 ), Callawonga-1 ( PEL 92 ), Middleton-1 ( PEL 106 ) and Udacha-1 ( PEL 106 ).


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PRODUCING

FIELDS

2006

2006 Annual Production Report PPL 204 ( Sellicks )

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ANNUAL REPORT ON PRODUCTION OPERATIONS

PPL 204 ( SELLICKS )

FOR THE PERIOD : January 1st, 2006 to December 31st, 2006 1. Summary of Regulated Activities undertaken

Regulated activities associated with oil production operations are defined in the

Regulations of the Petroleum Act 2000 to include :

• physical and geophysical surveys of land;

• drilling of wells;

• processing of substances recovered from a well;

• construction of borrow pits;

• installation and operation of plant and equipment;

• water disposal; and

• construction of roads, camps, airports, buildings and other

infrastructure.

No geophysical surveys were undertaken on PPL 204 during the reporting period. Two development wells, Sellicks-2 and Sellicks-3, were drilled in May and June, 2006. The surface locations of the two wells were only 5 metres apart, and located approximately 200 metres to the south-west of Sellicks-1well. Sellicks-3 was drilled at an angle to intersect a target approximately 300 metres to the north-west of its surface location. Both wells were completed as producers. The formation fluid drawn from the three Sellicks wells is processed to separate oil from the formation water via a separator tank and skimmer pond. A total of 42,097 barrels of oil and 441,989 barrels of formation water were produced during the twelve month reporting period. No new borrow pits were constructed and no major plant or equipment was installed at the Sellicks facility during the reporting period . Formation water from the three Sellicks wells is disposed into a bunded evaporation pond. Beach obtained approval from PIRSA in 2004 to establish an additional ‘freeform’ evaporation pond alongside the facility to store ‘overflow’ formation water produced from the Sellicks-1 well.



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However production rates from the well then declined substantially, and the additional water disposal capacity has thus far not been required. The two evaporation ponds have comfortably accommodated the additional volume of water being produced from the two new wells, Sellicks 2 and 3. There was no major construction of roads or other facilities on PPL 204. Routine maintenance continued on the existing haul road, and minor upgrades were carried out on the accommodation facilities.

2. Compliance Report Attached as Appendix III is a report on the level of compliance with the Petroleum Act, its Regulations, the terms of the PPL 204 Licence, and Beach Petroleum’s “ Statement of Environmental Objectives – Cooper Basin Petroleum Production Operations ( November 2003 ) ”.

3. Audits In October 2006, a safety consultant was engaged to undertake an audit of the production operations at each of Beach Petroleum’s Cooper Basin facilities to assess them in terms of their compliance with good oilfield HSE practice. The audit was designed to simulate a “Fit for Purpose” audit by a regulator, and the recommendations from the audit were addressed. An Emergency Response Drill was also carried out in conjunction with the audit to test the response systems described in the Beach HSE system. In July, 2006, an environmental consultant was engaged to undertake an audit of the production operations at Christies and Sellicks to assess them in terms of their compliance with good oilfield practice. 4. Reports and Data A list of all Reports and data submitted to PIRSA relating to the production operations at Sellicks during the reporting period is attached as Appendix II. 5. Incidents No incidents occurred which required reporting to PIRSA under the definition of Reportable Incidents in the Beach Petroleum Production SEO. 6. Foreseeable threats A major ( “once in 10 years” ) flood of the Cooper Creek is the only foreseeable threat to the production operations at the Sellicks facility. A flood of this magnitude originates several hundred kilometers upstream in Queensland, and requires several months to reach the section of the Cooper Creek nearest the Sellicks facility.



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Such an extensive warning period would provide the opportunity for an orderly shutdown and abandonment of the facility, incorporating appropriate measures to minimize the damage to the facility. 7. Operations Proposed for 2007 Operations at the Sellicks facility are expected to continue in a similar manner to the operations over the previous 12 months. The rate of oil production from the three Sellicks wells currently requires, on average, two to three road tankers per week to truck the produced oil off site. It is likely that this average rate will increase slightly if production levels from the two new wells remain strong over the medium term. There are no current plans for further geophysical surveys or drilling on PPL 204.

8. Estimated Production for 2006 Total production from PPL 204 for the next 12 month reporting period is estimated to be in the order of 70,000 barrels ( an average of 200 barrels per day ). 9. Proposed Development Activities The construction of an additional dewatering tank is scheduled during the next reporting period. The new tank will process the fluid product from the two new wells, Sellicks-2 and Sellicks-3. The current jet pump will be replaced by a higher performance Reda jet pump to maximize throughput. 10. Expenditure on Regulated Activities For accounting purposes, the production operations at both the Sellicks and Christies fields are considered as a single operation, as the two fields are owned by the same Joint Venture and operated by a single crew, based at the Sellicks facility. Attached as Appendix I is a table providing a breakdown of the combined expenditure on these two fields into the categories defined in Regulation 33 (3) of the Petroleum Act.

OATIS

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Commercial in Confidence

2006 Annual Production Report PPL 205 ( Christies )

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PPL 205 ( CHRISTIES )

FOR THE PERIOD : January 1sth, 2006 to December 31st, 2006 1. Summary of Regulated Activities undertaken










infrastructure.

A 3D seismic survey was recorded in December 2006 over a large portion of PEL 92, which included the entire area of PPL 205. Two wells, Christies-4 and Christies -5, were drilled on the Christies field during the reporting period. The formation fluid produced from the Christies-1, Christies-2 and Christies-3 wells is processed to separate the oil from the formation water via two separator tanks. A total of approximately 352,240 barrels of oil and 2,047,872 barrels of formation water were produced during the reporting period. On-going maintenance of the haul road from Christies to Lycium required clay material to be extracted from the borrow pits that were established along the route of the road during its construction. Plant and equipment installed at the Christies field during the reporting period included :



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• the two new wells, Christies-4 and Christies-5 were connected to the jet

pump system;

• commenced discharging the ‘overflow’ of production water from the

evaporation ponds to a naturally confined ponding area, approximately 1500

metres to the south-east of the facility; via a purpose built above-ground pipe.

Formation water from the five producing wells ( Christies-1, Christies-2, Christies-3, Christies-4 and Christies-5 ) is discharged from the two dewatering tanks into a lined interceptor pond, and from there into two evaporation ponds. Regular analyses of the water entering the interceptor pond and the water entering the evaporation ponds has shown that the hydrocarbon concentrations are well within the levels regarded as acceptable by industry standards.

The haul road which heads east from the Christies facility to intersect the Sellicks haul road at Lycium bore received on-going maintenance ( repair of claytop surface ) to accommodate the increasing traffic of road tankers.

2. Compliance Report Attached as Appendix 1 is a report on the level of compliance with the Petroleum Act, its Regulations, the terms of the PPL 205 Licence, and Beach Petroleum’s “ Statement of Environmental Objectives – Cooper Basin Petroleum Production Operations ( November 2003 ) ”.

3. Audits In October 2006, a safety consultant was engaged to undertake an audit of the production operations at each of Beach Petroleum’s Cooper Basin facilities to assess them in terms of their compliance with The audit was designed to simulate a “Fit for Purpose” audit by a regulator, and the recommendations from the audit were addressed. An Emergency Response Drill was also carried out in conjunction with the audit to test the response systems described in the Beach HSE system. In July, 2006, an environmental consultant was engaged to undertake an audit of the production operations at Christies and Sellicks to assess them in terms of their compliance with good oilfield practice. 4. Reports and Data A list is attached ( Appendix II ) of all Reports and data relating to the production operations at Christies that were submitted to PIRSA during the reporting period. 5. Incidents No incidents occurred at the Christies field which required reporting to PIRSA under the definition of Reportable Incidents in the Beach Petroleum Production SEO.



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6. Foreseeable threats A major ( “once in 10 years” ) flood of the Cooper Creek is the only foreseeable threat to the production operations of the Christies facility. A flood of this magnitude originates several hundred kilometers upstream in Queensland, and takes several months to reach the section of the Cooper Creek nearest the Christies facility. With such an extensive advanced warning period, there is sufficient opportunity for an orderly shutdown and abandonment of the facility, incorporating appropriate measures to minimize the damage to the facility. 7. Operations Proposed for 2007 During the 12 - month reporting period, production from the Christies field required, on average, two or three road tankers each day to transport the product off site. Anticipated production from the field is expected to decline during 2007, requiring on average, one to two road tankers each day to transport the product off site. 8. Estimated Production for 2007 Total oil production from PPL 205 for the next 12 month reporting period is estimated to be in the order of 220,000 barrels ( average of 600 barrels per day ). 9. Proposed Development Activities There are currently no firm plans for further drilling on PPL 205. Further development work will focus on stimulating production from the two new wells, Christies-4 and Christies-5, which have as yet failed to provide steady production flow. No upgrades to the water handling facilities are scheduled for 2007. Data from the 3D survey recorded in December 2006 will be interpreted during 2007. The Christies field will continue to be serviced by the operators from the nearby Sellicks facility, which is permanently manned. 10. Expenditure on Regulated Activities For accounting purposes, production operations for both the Sellicks and Christies fields are considered as a single operation, as the two fields are owned by the same Joint Venture and operated by a single crew, based at the Sellicks facility. Attached as Appendix III is a table providing a breakdown of the combined expenditure on these two fields into the categories defined in Regulation 33 (3).

OATIS

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2006 Annual Production Report PPL 210 ( Aldinga )

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PPL 210 ( ALDINGA )

FOR THE PERIOD : January 1st, 2006 to December 31st, 2006 1. Summary of Regulated Activities undertaken





• injection of water into a natural reservoir in order to enhance

production of petroleum






infrastructure.

No physical or geophysical surveys were conducted on the area covered by PPL 210 during the reporting period. No wells were drilled on PPL 210 during the reporting period. The formation fluid from the Aldinga-1 well was processed to separate the oil from the formation water via a skimmer tank. A total of 6,687 barrels of oil and 442 barrels of formation water were produced during the twelve month reporting period. No new borrow pits were constructed and no new plant or equipment was installed at the Aldinga field during the reporting period. The volume of formation water produced from the Aldinga field is minimal, typically around 200 litres per day. The water is tapped off the skimmer tank to evaporate. There was no major road construction at the Aldinga field. Routine maintenance continued on the existing haul road.



2. Compliance Report Attached as Appendix 1 is a report on the level of compliance with the Petroleum Act, its Regulations, the terms of the PPL 210 Licence, and Beach Petroleum’s “ Statement of Environmental Objectives – Cooper Basin Petroleum Production Operations ( November 2003 ) ”.

3. Audits The Aldinga facility is unmanned, and is serviced by the four- man crew based at the Sellicks facility. 4. Reports and Data A list of all Reports and data submitted to PIRSA relating to the production operations at Aldinga during the reporting period is attached as Appendix VII. 5. Incidents

No incidents occurred during the twelve month reporting period which required reporting to PIRSA under the definition of Reportable Incidents in the Beach Petroleum Production SEO.

6. Foreseeable threats There are no foreseeable threats to the Aldinga production facility. 7. Operations Proposed for 2007 There are no current plans for further development wells or geophysical surveys on PPL 210. Operations at the Aldinga facility are expected to continue in a similar manner to the operations over the previous 12 months. Although the production rate from Aldinga-1 is quite modest, it has again maintained consistency throughout 2006. Assuming the consistency continues, one road tanker per month will be required on average to truck the produced oil off site. 8. Estimated Production for 2007 Total production from PPL 210 for the next 12 month reporting period is estimated to be in the order of 5,500 barrels ( average of 15 barrels per day ). 9. Proposed Development Activities No significant infrastructure developments are anticipated on PPL 210 during the next 12 month reporting period.



10. Expenditure on Regulated Activities Attached as Appendix VI is the Statement of Expenditure for the Aldinga production operations ( PPL 210 ) covering the twelve month reporting period, from January 2006 to December 2006.

OATIS

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2006 Annual Production Report PPL 212 ( Kiana )

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PPL 212 ( KIANA )

FOR THE PERIOD : January 1st, 2006 to December 31st, 2006 1. Summary of Regulated Activities undertaken d










infrastructure.

No geophysical surveys were undertaken on PPL 212 during the reporting period. One development well, Kiana-2 was drilled in October, 2006, however it intersected no zones with potential for commercial hydrocarbon reserves and was accordingly plugged and abandoned. The formation fluid drawn from the Kiana-1 well is processed to separate oil from the formation water via a separator tank and skimmer pond. A total of 82,152 barrels of oil and 9,426 barrels ( 1,470 cu. metres ) of formation water were produced during the twelve month reporting period. No new borrow pits were constructed. The major plant or equipment installed at the Kiana facility during the reporting period consisted of a jet pump and facilities for handling the disposal of formation water, comprising of a lined interceptor pond and a storage ( evaporation) pond. A ‘freeform’ evaporation pond is located nearby the facility to accommodate any overflow from the bunded evaporation pond if required. There was no major construction of roads or other facilities on PPL 212. Routine maintenance continued on the existing short haul road out to the main Moomba – Tantanna (Santos) haul road.



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2. Compliance Report Attached as Appendix XII is a report on the level of compliance with the Petroleum Act, its Regulations, the terms of the PPL 212 Licence, and Beach Petroleum’s “ Statement of Environmental Objectives – Cooper Basin Petroleum Production Operations ( November 2003 ) ”.

3. Audits The Kiana facility is unmanned. The facility is operated by the personnel based at the Sellicks facility, 50 kilometres to the north-west. In October 2006, a safety consultant was engaged to undertake an audit of the production operations at all of Beach Petroleum’s Cooper Basin facilities to assess them in terms of their compliance with good oilfield HSE practice. The audit was designed to simulate a “Fit for Purpose” audit by a regulator, and the recommendations from the audit were addressed. An Emergency Response Drill was also carried out in conjunction with the audit to test the response systems described in the Beach HSE system. 4. Reports and Data A list of all Reports and data submitted to PIRSA relating to the production operations at Kiana during the reporting period is attached as Appendix ??. 5. Incidents No incidents occurred which required reporting to PIRSA under the definition of Reportable Incidents in the Beach Petroleum Production SEO. 6. Foreseeable threats There are no foreseeable threat to the production operations at the Kiana facility. 7. Operations Proposed for 2007 Operations at the Kiana facility are expected to continue in a similar manner to the operations over the previous 12 months. During the reporting period, the rate of oil production from Kiana-1 varied considerably, requiring at times at least one road tanker per day to truck the produced oil off site. At the end of the reporting period, the production rate had fallen to a level requiring one road tanker per week on average. . There are no geophysical surveys or further development drilling scheduled for PPL 212 at this stage.



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8. Estimated Production for 2007 The total production from PPL 212 for the next 12 month reporting period is estimated to be in the order of 10,000 barrels ( average of 200 barrels per day ). 9. Proposed Development Activities No significant infrastructure developments are anticipated on PPL 212 during the next 12 month reporting period. 10. Expenditure on Regulated Activities Attached as Appendix X is a table providing a breakdown of the expenditure on the Kiana field into the categories defined in Regulation 33 (3) of the Petroleum Act.

OATIS

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APPENDIX II REPORTS SUBMITTED TO PIRSA DURING 2006 FOR

PPL 204 ( SELLICKS FIELD ) AND PPL 205 ( CHRISTIES FIELD )

QUARTERLY REPORTS :

DUE DATE DATE SUBMITTED

31-Dec-05 1-Feb-06

31-Mar-06 1-May-06

30-Jun-06 4-Jul-06

30-Sep-06 31-Oct-06

REPORTABLE INCIDENT REPORTS


31-Dec-05 1-Feb-06

31-Mar-06 28-Apr-06

30-Jun-06 28-Jul-06

30-Sep-06 NOT REQUIRED ***


CASED - HOLE ACTIVITY REPORTS

OTHER REPORTS / DATA

*** By agreement with PIRSA, there is no longer a requirement to submit a Quarterly Incident Report if there have been no reportable incidents during the Quarter.

Filename : 8_Reports to PIRSA_Quarterly_2006_Christies & Sellicks

APPENDIX III

ANNUAL

COMPLIANCE

REPORT

FOR

PPL 204 ( SELLICKS )

AND

PPL 205 ( CHRISTIES )

FOR THE PERIOD

( JANUARY 2005 - DECEMBER 2005 )


APPENDIX III Compliance Report for PPL 204 ( Sellicks ) and PPL 205 ( Christies ) - Jan 06 to Dec 06

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& Regs.doc

Introduction Pursuant to Regulation 33 (2) of the 2000 Petroleum Act, Beach Petroleum, as operator of PPL 204 ( Sellicks ) and PPL 205 ( Christies ) in the Cooper Basin, South Australia, herewith submits its report on the compliance of its oil production operations with :

• the Petroleum Act and the Licence conditions of PPL 204 and PPL 205

( Section 1 ),

• the Regulations of the Petroleum Act ( Section 2 ), and

• the various Statements of Environmental Objectives ( SEOs ) to which Beach Petroleum was committed in conducting its production operations ( Section 3 ).

Section 1 :

Compliance with the Petroleum Act and PPL Licence Conditions There were no instances during the reporting period in which Beach failed to comply with the 2000 Petroleum Act, or the conditions of the PPL 204 Licence or the PPL 205 Licence, as a consequence of its production and development operations at the Sellicks and Christies fields. Section 2 :

Compliance with the Regulations of the Petroleum Act A) Drilling Operations During the reporting period, two wells, Sellick-2 and Sellicks-3 were drilled in PPL 204, and a further two wells, Christies-4, and Christies-5 were drilled in PPL 205. There were no instances in which Beach failed to comply with the Regulations of the 2000 Petroleum Act as a consequence of these development drilling operations .

• Notifications for 2006 wells The appropriate notification process was followed prior to the drilling of each of these wells, as summarized in the attached table “Checklist for Notifications of Drilling Operations”. All notifications were issued with the required advance warning period.


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& Regs.doc

• Reports for 2006 wells

The attached table “Checklist for Submission of Drilling Reports ” summarises the compliance achieved in submitting reports and data associated with the drilling of the four development wells. The Well Completion Reports for the four wells were all submitted after the allowed six-month period had expired. The period by which they were overdue varied between two days and three weeks. Additional staff have been engaged to rectify this trend. B) Seismic Operations There were no seismic operations on PPL 204 ( Sellicks ) during the reporting period. In December 2006, the Neritus 3D survey was recorded over an area which included all of the PPL 205 ( Christies ) Licence area. The Annual Report for Year 6 of PEL 92 will include a report on the level of compliance of these survey operations with the Regulations.

CHECKLIST FOR NOTIFICATIONS OF DRILLING OPERATIONS

PERMIT : PPL 204 ( Sellicks Field ) PERIOD : 1 January 2006 - 31st December 2006 PAGE 1

Well Name : Sellicks -2 Commenced Drilling Operations : 11th May 2006 Completed Drilling Operations : 2nd June 2006

REQUIREMENT Person / agency to whom Notification is to be provided

Period required for Notification Due Date for Notification Actual Date of Notification Beach officer responsible for compliance

Comments

Notification to PIRSA of proposed drilling activity including demonstration of the suitability of an existing SEO.

PIRSA / Mike Malavazos 21 days prior to proposed start date 20-Apr-06 31-Mar-06 Exploration Manager Notification period is reduced to 21 daysas a result of PIRSA granting Beach Low Supervision classification.

Notification to PIRSA of proposed commencement of earthworks – preparation of access tracks and well leases

PIRSA / Tony Wright 2 days prior to commencement of earthworks

early April 31-Mar-06 Exploration Manager Lease pad for the Sellicks #2 well was adjacent to the existing pad for the Sellicks production facility. Earthworks for this combined lease pad commenced in late April. Landowner was notified of impending earthworks on3rd Jan 2006.

Notification to landowner (s) Pastoral Lessee; 21 days prior to proposed start date 20-Apr-06 3-Jan-06 Exploration Manager G.Betts - Mungeranie Station

National Parks; 21 days prior to proposed start date Exploration Manager

Native Title Claimant(s); 21 days prior to proposed start date 20-Apr-06 3-Jan-06 Exploration Manager Dieri & ALRM

other PEL or PL licensees as appropriate.

21 days prior to proposed start date 20-Apr-06 3-Jan-06 Exploration Manager

Santos - T. Whitelaw

Well Name : Sellicks -3 Commenced Drilling Operations : 4th June 2006 Completed Drilling Operations : 22nd June 2006REQUIREMENT Person / agency to whom

Notification is to be providedPeriod required for Notification Due Date for Notification Actual Date of Notification Beach officer responsible for

complianceComments


PIRSA / Mike Malavazos 21 days prior to proposed start date 13-May-06 13-Apr-06 Exploration Manager Notification was 30 days prior to commencement,



early April 13-Apr-06 Exploration Manager The Sellicks-3 well was spudded approximately 5 metres from the Sellicks-2 well. Hence the drilling operations for both wells used the same lease pad. Earthworks for this combined lease pad commenced in late April. The landowner was notified of impending earthworks on 3rd Jan 2006.

Notification to landowner (s) Pastoral Lessee; 21 days prior to proposed start date 13-May-06 3-Jan-06 Exploration Manager G.Betts - Mungeranie Station

National Parks; 21 days prior to proposed start date

Native Title Claimant(s); 21 days prior to proposed start date 13-May-06 3-Jan-06 Dieri & ALRM


21 days prior to proposed start date 13-May-06 3-Jan-06 Exploration ManagerSantos - T. Whitelaw

NOT REQUIRED

NOT REQUIRED


PERMIT : PPL 205 ( Christies Field ) PERIOD : 1 January 2006 - 31st December 2006 PAGE 2

Well Name : Christies-4 Commenced Drilling Operations : 16th March 2006 Completed Drilling Operations : 27th March 2006

REQUIREMENT Format Person / agency to whom Notification is to be provided


Comments


PIRSA / Mike Malavazos 21 days prior to proposed start date 23-Feb-06 31-Jan-06 Exploration Manager



early Feb 31-Jan-06 Exploration Manager Earthworks commenced in early March. Drill pad was built adjacent to the existing pad used for the production facility.

Notification to landowner (s) Pastoral Lessee; 21 days prior to proposed start date 23-Feb-06 3-Jan-06 Exploration Manager G.Betts - Mungeranie Station . Notification of the proposed earthworks was sent ?? days before start.

National Parks; 21 days prior to proposed start date Exploration Manager

Native Title Claimant(s); 21 days prior to proposed start date 23-Feb-06 3-Jan-06 Exploration Manager Dieri & ALRM


21 days prior to proposed start date 23-Feb-06 3-Jan-06 Exploration ManagerSantos - T. Whitelaw

Well Name : Christies-5 Commenced Drilling Operations : 29th March 2006 Completed Drilling Operations : 16th April 2006

REQUIREMENT Format Person / agency to whom Notification is to be provided


Comments


PIRSA / Mike Malavazos 21 days prior to proposed start date 8-Mar-06 1-Mar-06 Exploration Manager


PIRSA / Tony Wright 2 days prior to proposed start date early March 9-Feb-06 Exploration Manager Earthworks commenced in mid March. Drill pad was built adjacent to the existing pad used for the Christiesproduction facility.

Notification to landowner (s) Pastoral Lessee; 21 days prior to proposed start date 8-Mar-06 3-Jan-06 Exploration Manager G.Betts - Mungeranie Station . Notification of the proposed earthworks was sent ?? days before start.

National Parks; 21 days prior to proposed start date

Native Title Claimant(s); 21 days prior to proposed start date 8-Mar-06 3-Jan-06 Dieri & ALRM


21 days prior to proposed start date 8-Mar-06 3-Jan-06 Exploration ManagerSantos - T. Whitelaw

Not Required

Not Required

CHECKLIST FOR SUBMISSION OF DRILLING REPORTS TO PIRSA

PERMIT : PPL 204 ( Sellicks Field ) PERIOD : 1 January 2006 - 31st December 2006 PAGE 1

Well Name : Sellicks -2 Commenced Drilling Operations : 11th May 2006 Completed Drilling Operations : 2nd June 2006

REPORT / DATA SET Format Person / agency to whom information is to be provided.

Period allowed for Submitting data. Date Due Date Submitted Beach officer responsible for compliance

Comments

Daily Drilling Reports PIRSA Within 12 hrs of report period. During Drilling Operations

During Drilling Operations

Exploration Manager

Wireline logs PIRSA Within 2 months of acquisition of data. 27-Jul-06 6-Jul-06 Exploration Manager Logs run on 27th May.

Mud logging data PIRSA Included with Daily Drilling Reports, then subsequently with the Well Completion Report.



Exploration Manager

Well samples PIRSA Within 6 months of rig release. 2-Dec-06 4-Sep-06 Exploration Manager Rig released 2nd June

Well Completion Reports Refer Note below

PIRSA Within 6 months of rig release. 2-Dec-06 4-Dec-06 Exploration Manager Non-Compliance : WCR submitted 2 days overdue

Reportable Incidents. PIRSA Serious incidents must be reported immediately ( within 24 hrs ), with a written report following within 3 months.

No Reportable Incidents

Exploration Manager

Note : Well Completion Reports contain Borehole Deviation data ; Surveyed Location of well ; and other technical reports associated with the well.

Well Name : Sellicks -3 Commenced Drilling Operations : 4th June 2006 Completed Drilling Operations : 22nd June 2006REPORT / DATA SET Format Person / agency to whom information

is to be provided.Period allowed for Submitting data. Date Due Date Submitted Beach officer responsible

for complianceComments



Exploration Manager

Wireline logs PIRSA Within 2 months of acquisition of data. 18-Aug-06 18-Aug-06 Exploration Manager Logs run on 18th June




Exploration Manager

Well samples PIRSA Within 6 months of rig release. 22-Dec-06 5-Oct-06 Exploration Manager

Well Completion Reports PIRSA Within 6 months of rig release. 22-Dec-06 8-Jan-07 Exploration Manager Non-Compliance : WCR submitted 20 days overdue



Exploration Manager



PERMIT : PPL 205 ( Christies Field ) PERIOD : 1 January 2006 - 31st December 2006 PAGE 2

Well Name : Christies-4 Commenced Drilling Operations : 16th March 2006 Completed Drilling Operations : 27th March 2006



Comments



Exploration Manager

Wireline logs PIRSA Within 2 months of acquisition of data. 24-May-06 30-Mar-06 Exploration Manager Wireline logs were recorded on 24th March




Exploration Manager

Well samples PIRSA Within 6 months of rig release. 27-Sep-06 26-Jun-06 Exploration Manager


PIRSA Within 6 months of rig release. 27-Sep-06 11-Oct-06 Exploration Manager Non-Compliance : WCR submitted 14 days overdue



Exploration Manager


Well Name : Christies-5 Commenced Drilling Operations : 29th March 2006 Completed Drilling Operations : 16th April 2006



Comments



Exploration Manager

Wireline logs PIRSA Within 2 months of acquisition of data. 12-Jun-06 27-Apr-06 Exploration Manager Logs were recorded on 12th April




Exploration Manager

Well samples PIRSA Within 6 months of rig release. 16-Oct-06 11-Jul-07 Exploration Manager

Well Completion Reports PIRSA Within 6 months of rig release. 16-Oct-06 31-Oct-06 Exploration Manager Non-Compliance : WCR submitted 15 days overdue



Exploration Manager



G:\Engineering\Regulatory and Data Management\Reporting\Annual Report to PIRSA for SA PPLs\2006\2006 Production Report_CD for PIRSA\15_ - PPLs 204 & 205_2006_Compliance

Report_SEOs.doc

Section 3 :

Compliance with Statements of Environmental Objectives ( SEOs ) 3A. Drilling Operations Four development wells were drilled on PPLs 204 and 205 during the reporting period : Sellicks-2 and -3, and Christies-4 and - 5. Government approval for Beach to drill each of these wells was conditional on Beach committing to achieving the objectives defined in the “Statement of Environmental Objectives for Drilling and Well Operations in the Cooper / Eromanga Basins – South Australia ( SEO )“. The assessment of Beach’s performance in achieving the SEO objectives cannot be completed until the well sites have been rehabilitated. Sellicks-2 and Sellicks-3 were drilled on the same lease area, located adjacent to the Sellicks production facility pad. As both wells were completed as producers, rehabilitation will not be undertaken until the production operations have ceased. The lease pads for the Christies-4 and Christies-5 wells were located within a few hundred metres of the Christies production facility pad. As both of these wells were also completed as producers, rehabilitation at these sites will also not commence until production from the Christies facility is no longer economic. Access tracks for these Christies wells were only a few hundred metres in length. Beach received a written request from the owner of Mungeranie station not to rehabilitate any part of the well site access tracks prepared on his property. Beach was satisfied that it has met all the other objectives required by the SEO for the drilling operations on these wells, and the spreadsheet below ( attached as Appendix IV ) summarises the strategies that were employed to achieve this compliance on each of the wells.



Report_SEOs.doc

3B.. Seismic Operations No seismic operations were undertaken under the authority of either PPL 204 or PPL 205 during the reporting period. The Neritus 3D survey, conducted in December 2006 as part of the PEL 92 work program, included the whole area of PPL 205. The compliance of these operations with the “SEO for Seismic Operations in the Cooper Basin “ will be reported in the Annual Report for Year 6 of PEL 92.



Report_SEOs.doc

3C. Production Operations

• Sellicks Field In September 2003 , PIRSA granted Petroleum Production Licence 204, covering the estimated area of the production field at Sellicks. The granting of the PPL was conditional on Beach committing to achieving the objectives defined in Beach’s “ Statement of Environmental Objectives – Cooper Basin Petroleum Production Operations ( November 2003 ) ”. Beach is satisfied that the production operations at the Sellicks facility during the twelve-month reporting period have met the objectives required by the SEO, and the spreadsheet below summarises the strategies that were employed to achieve this compliance.

• Christies Field In October 2004, PIRSA granted Petroleum Production Licence 205, covering the estimated area of the production field at Christies. As with PPL 204 ( Sellicks ), the granting of PPL 205 was conditional on Beach committing to achieving the objectives defined in Beach’s “ Statement of Environmental Objectives – Cooper Basin Petroleum Production Operations ( November 2003 ) ”. Beach is satisfied that the production operations at the Christies facility have met the objectives required by the SEO, and the spreadsheet below provides comments on the strategies that were employed to achieve this compliance.

ASSESSMENT OF BEACH PETROLEUM’S PERFORMANCE IN ACHIEVING APPENDIX IV THE ENVIRONMENTAL OBJECTIVES DEFINED IN THE COOPER BASIN DRILLING SEO

PPL Nos. : 204 & 205 YEAR : 2006 WELL NAMES : Sellicks-2, Sellicks-3, Christies-4, and Christies-5

OBJECTIVE COMMENT GUIDE TO HOW OBJECTIVES CAN BE ACHIEVED

ASSESSMENT CRITERIA PERFORMANCE IN ACHIEVING OBJECTIVE

Page 1 of 31 G:\Engineering\Regulatory and Data Management\Reporting\Annual Report to PIRSA for SA PPLs\2006\2006 Production Report_CD for PIRSA\16_Production Report - 2006_Audit_Drilling SEO_Combined Table for all wells.doc

Objective 1: Minimise the risk to public and other third parties.

The criteria for assessing the achievement of this objective have been developed on the basis of the current understanding of the risks associated with drilling and well operations.

The key to achieving this objective in relation to both downhole abandonment and surface well site restoration is to ensure that the visual prominence of the abandoned well site and its access track(s) is minimised to the extent where it is difficult for third parties to detect and therefore

All employees and contractor

personnel complete a safety induction prior to commencement of work in the field.


personnel undertake a refresher induction every 2 years.

Signage in place to warn third

parties of access restrictions to operational areas, with particular warnings when potentially dangerous operations are being undertaken.

Reasonable measures implemented to ensure no injuries to the public or third parties.

The design and operation of the wells was undertaken in accordance with Beach safety policies, standards and guidelines.

All four wells were drilled adjacent to the existing Sellicks and Christies- production facilities. Access to these facilities is via the oil tanker haul roads which are permanently signposted to advise that only authorised personnel are permitted to use the road.

All employees undertook a safety induction prior to commencing work in the field and they undertake refresher courses if/when required.






access these sites.

Permit to work systems in place for

staff and contractors in dangerous situations.

Beach Permit to Work system was in operation during the drilling operations to control potentially dangerous situations.

Objective 1: ( Continued )

.

The backfilling of the well cellar and the removal of rubbish from the restored well site should be carried out

Fires or explosions at well sites could result in complications resulting in a spill of production fluids (formation water and hydrocarbon), atmospheric emissions, disturbance of native vegetation and wildlife habitat, loss of reservoir pressure, and risk to

Reporting systems for recording

injuries and accidents in place, and annual; (at minimum) review of records to determine injury trends. Implementation of appropriate corrective actions.

Ensuring safety management plans

are updated and reviewed. All appropriate PPE (personnel

protective equipment) is issued and available as required in accordance with company

Accident / incident reporting systems were in place as defined in the Beach Drilling Operation Manual. Records are reviewed regularly to assess trends.

Beach safety management plans are updated and reviewed on a regular basis.

Appropriate PPE was issued to all personnel involved in the






employees, contractors and the public.

operating requirements and applicable standards.

drilling operations.

Objective 1: ( Continued)

The movement of heavy equipment associated with rig moves present a risk to the safety of employees, contractors and third parties (ie tourists).

Effective Emergency Response

Plan (ERP) and procedures are in place in the event of a fire or explosion.

Annual exercise of ERP.

Communication of rig moves and

other potential hazards to safety associated with drilling and well operations to potentially affected parties prior to commencement of operations.

An Emergency Response Plan (ERP) Bridging document was prepared for the drilling operations at each well and all personnel involved in the operations were aware of the Emergency Response Plan. However, no situation arose that required the implementation of the Plan.

Beach undertakes regular ERP exercises at selected drilling operations.

Beach maintained regular contact with landholders and associated stakeholders during the drilling operations at teach site.






Objective 2 : Minimise disturbance and avoid contamination to soil.

The impacts associated with soil disturbance can potentially include wind and water erosion and dust generation. The main source of disturbance to soils is associated with lease and access track construction, creation of borrows pits, restoration activity, vehicle movement in off-road locations and sub-surface excavations (i.e. sumps, flare pits and borrow pits).

Well Site and Access Track Construction Consider alternate routes during

planning phase to minimise environmental impacts

Gibber mantle on access tracks and well sites (excluding sumps) has not been removed, only rolled, during construction and restoration on gibber and tableland land systems.

Topsoil stockpiled (including gibber mantle) from sump construction and respread on abandonment.

The need to traverse sensitive land systems and the methods of managing the impacts should be justified in accordance with company procedures, recorded and available for auditing.

Well Site and Access Track Construction 0, +1 or +2 GAS criteria

are attained for “Minimise visual impacts of abandoned well sites and access tracks” objective as listed in Appendix 4 for well lease and access track construction.

No unauthorised off-road driving or creation of shortcuts.

No construction activities are carried out on salt lakes, steep tableland land systems or wetlands land systems (as defined in EIR).

• Sites were constructed in accordance with the guidelines outlined in Guidelines for Lease Construction and Restoration.

• None of the access tracks traversed any section of gibber mantle.

• Topsoil was stockpiled for subsequent respreading when restoration activities are conducted.

• Vehicle movements were strictly limited to the defined access track and well pad area – areas which had been given cultural heritage clearance for the drilling







( Minimise disturbance and avoid contamination to soil.)

Production Testing / Well Blowdowns If appropriate use:

- impermeable flare pit - flare tanks.

Borrow pit construction and

restoration 0, +1 or +2 GAS criteria

are attained for “Minimise Visual Impacts for constructing

operations.

• As each of the wells was located beside existing production facilities, restoration of these sites will be incorporated in the rehabilitation of the facility area, when production eventually becomes uneconomic.

• The sites will then be rehabilitated and restored in accordance with the guidelines set down in PIRSA’s Field Guide for the Environmental Assessment of Abandoned Petroleum Wellsites in the Cooper Basin, South Australia to attain the highest feasible GAS rating. .

• Borrow pits will be








borrow pits” objective as listed in Appendix 3, and “Minimise visual impacts” and “Minimise impact on soil” objectives as listed in Appendix 5.

Production Testing / Well Blowdowns No soil contamination as

a result of production testing or well blowdown operations.

rehabilitated and restored in accordance with the guidelines set down in PIRSA’s Field Guide for the Environmental Assessment of Abandoned Petroleum Wellsites in the Cooper Basin, South Australia, to attain the highest feasible GAS rating.

• All fuel, oil and chemicals were stored in accordance with relevant standards.

• Refuelling was undertaken as per Drilling Contractors’ procedures.

• There were no spills during the drilling operations that required reporting or corrective action to be taken in accordance with the Beach Incident Reporting






system.



Fuel and Chemical Storage and Handling All fuel, oil and chemical storages

bunded in accordance with the appropriate standards

Records of spill events and corrective actions maintained in accordance with company procedures.

Spills or leaks are immediately reported and clean up actions initiated.

Logged incidents are reviewed

annually to determine areas that may require corrective action in order to reduce spill volumes in subsequent years (and drive continual improvement).

Chemical and fuel storage procedures, including signage, are reviewed and monitored in audit

Fuel and Chemical Storage and Handling No spills/leaks outside of

areas designed to contain them.

Level of hydrocarbon continually decreasing for in situ remediation of spills.

Soils remediated to a level as determined by the SHI process.

There were no spills during

the drilling operations outside of areas designed to contain them.







process. Spill Response / Contingency Planning Results of emergency response

procedures carried out in accord with Regulation 31 show that oil spill contingency plan in place in the event of a spill is adequate and any necessary remedial action needed to the plan is undertaken promptly.

Oil spill contingency plan (reviewed annually) is up to date with specific scenarios relating to spills to creeks and floodplain areas.

Spill response equipment is audited

annually. Annual spill response training

exercise is undertaken.

• Beach’s Oil Spill Contingency Plan is included in the Emergency Response Plan.








Waste Disposal (domestic, sewage and sludges)

Covered bins are provided for the collection and storage of wastes.

All loads of rubbish are covered during transport to the central waste facility.

Pits are not established in locations, which pose an unacceptable hazard to stock or wildlife.

All domestic wastes are

disposed of in accordance with EPA licensing requirements.

0, +1 or +2 GAS criteria for ‘Waste material’ objective is attained.

No spills or leaks from sewage treatment process and sludge pits.

• Wastes were managed as described in the Cooper Basin Drilling & Well Operations EIR.

• Wastes were collected, stored and transported in covered bins / containers.

• All rubbish was disposed of at a licensed waste facility.






Objective 3 : Avoid the introduction or spread of pest plants and animals and implement control measures as necessary.

Activity associated with lease and access track construction, such as movement of vehicles and equipment, is a potential source of weed or disease introduction and spread. The most effective technique to prevent the introduction and spreading of weed species is to ensure that vehicles and equipment are appropriately cleaned prior to entry into a construction site.

Where appropriate a weed and feral

animal management strategy is in place (avoidance and control strategies).

Rig and vehicle wash downs are initiated in accordance with the management strategy.

No weeds or feral

animals are introduced to operational areas.

• Drilling rig and associated equipment and vehicles had already been working in the Cooper Basin prior to commencing these drilling operations .






Objective 4 : Minimise disturbance to drainage patterns and avoid contamination of surface waters and shallow ground water resources.

The main threats to drainage patterns and surface waters, and shallow ground waters are considered to be interruption of natural flows as a result of earthworks and contamination.

Access track and well site selection should aim to minimise impact to drainage systems, by avoiding sensitive areas and appropriate construction methods to avoid windrows.

Drilling Mud Sumps and Flare Pits

All drill cuttings, muds and non toxic drill fluids are contained within the designated mud sumps with adequate freeboard at the completion of operations to allow for a 1m cover of clean fill at remediation.

Well Lease and Access Track Construction

Well leases and access tracks are located and constructed to maintain pre-existing water flows (i.e. channel contours are maintained on floodplains and at creek crossings).


No overflow of drill cuttings, muds and other drilling fluids from mud sumps.

No waste material disposal to sumps and

• None of the well sites were located in areas where flooding from local watercourses was likely to occur.

The Sellicks facility is potentially subject to inundation in the event of a major ( “once in 10 years” ) flood of the Cooper Creek. The facility has been designed to minimise any contamination of temporary surface waters in such an event.

• All drill pads and access tracks were constructed and located to avoid the possibility of flood waters diverting from their natural






flare pits. direction of drainage in the event of local inundation.

• All drill cuttings, muds, and non toxic drill fluids were contained within designated mud sumps with adequate freeboard at the completion of operations to allow for a 1m cover of clean fill at remediation.

Objective 4 : ( Continued)

( Minimise disturbance to

There is potential for the contamination of chemical and fuel storage areas, from oil and gas systems at well heads, during transportation of fuel and chemicals and during transportation of wastes. Localised contamination may result from spills or leaks of

Well Heads (Oil and Gas Systems) Where appropriate, imperviously

lined well cellars are installed on oil wells.

Chemical containment devices are installed on gas well skids.

Well heads shut in and chemicals removed prior to flood events.

Jet pumps are installed within

Well Heads (Oil and Gas Systems) No leaks/spills outside of


• All four wells were completed as production wells, and connected to the adjacent existing facilities by above - ground flowlines, which are inspected daily to ensure no leakage occurs.






drainage patterns and avoid contamination of surface waters and shallow ground water resources. )

well operations chemicals (eg. corrosion inhibitors) during storage and handling.

containment device with an adequately sized containment sump.

Well Blowdown / Production Testing Activity is conducted in accordance

with accepted industry standards / good oilfield practice.

If appropriate use: - impermeable flare pit - flare tanks - separators - supervision

Well Blowdown/Production Testing No water (surface or

groundwater) contamination as a result of production testing or well blowdown operations.

• The Production Testing facilities at Silver Sands and Callawonga have been designed to prevent surface water or ground water contamination from these operations.

Objective 4 ( Continued )

( Minimise


bunded in accordance with the

Fuel/Chemical Storage and Handling No leaks/spills outside of

• Specific oil spill containment / cleanup materials were on site at all times.






disturbance to drainage patterns and avoid contamination of surface waters and shallow ground water resources. )

appropriate standards Records of spill events and corrective

actions maintained in accordance with company procedures.


Logged incidents are reviewed annually to determine areas that may require corrective action in order to reduce spill volumes in subsequent years (and drive continual improvement).

Chemical and fuel storage procedures, including signage, are reviewed and monitored in audit process.


• All fuel, oil and chemicals were in accordance with relevant standards

Refuelling was undertaken as per Drilling Contractors’ procedures.








Objective 4 cont : ( Minimise disturbance to drainage patterns and avoid contamination of surface waters and shallow ground water resources. )

The major threat of spills is the threat to soil, vegetation and watercourses directly impacted by the spill. Therefore, the achievement of this objective also consequently contributes to the achievement of Objectives 2 and 7 in relation to minimising the impacts on soil and natural habitats.

Avoidance of spills will be paramount in areas where the spill can be potentially spread beyond the immediate confines of the spill area into sensitive environments such as creeks and wetlands.

Spill Response / Contingency Planning Results of emergency response


Oil spill contingency plan (reviewed

annually) is up to date with specific scenarios relating to spills to creeks and floodplain areas.










Objective 5 :

Avoid disturbance to sites of cultural and heritage significance.

The aim of the objective is to ensure that any sites of cultural (Aboriginal or non-Aboriginal) heritage significance are identified and protected.

Consultation with stakeholders (i.e. government agencies, landholders etc) in relation to the possible existence of heritage sites, as necessary.

Heritage report forms completed for any sites or artefacts identified, and report forms forward to the Department of State Aboriginal Affairs (DOSAA).

Survey records are kept and are available for auditing.

Areas requiring remediation which lie outside previously surveyed sites should be surveyed in accordance with company heritage clearance procedures.

Proposed well sites and access tracks have been surveyed and any sites of Aboriginal and non-Aboriginal heritage identified.

Any identified cultural and heritage sites have been avoided.

Note:

Where a negotiated agreement or determination for heritage clearance is in place, compliance with the negotiated agreement or determination takes precedence over the above criteria.

Beach have an agreement with the Dieri Aboriginal Corporation Native Title Claimant group which specifies the requirements for scouting proposed wells and access tracks to identify and avoid areas of heritage value and archaeological significance.

Joint site visits were carried out with the Native Title Claimant group. Proposed drilling locations and access routes were agreed and given heritage clearance.

Areas of significance were recorded and marked as exclusion zones.






Objective 6 : Minimise loss of aquifer pressures and avoid aquifer contamination.

This objective seeks to protect the water quality and water pressure of aquifers that may potentially be useful as water supplies, and to maintain pressure in sands that may host petroleum accumulations elsewhere. To address this objective, the risks of cross flow between aquifer cells known to be permeable and in natural hydraulic isolation from each other, or where there is insufficient information to determine that they are permeable or in hydraulic communication, must be assessed on a case by case basis and procedures implemented to minimize the

Drilling & Completion Activities :

A competent cement bond between aquifer and hydrocarbon reservoirs is demonstrated. For cases where isolation of these formations is not established, a risk assessment incorporating the use of pressure / permeability / salinity data is undertaken in consultation with DLWBC & AAWCMB to determine if lack of cement or poor bond will cause or has caused damaging crossflow which needs to be remediated.

Producing, Injection and, Inactive Wells

Monitoring programs implemented (eg. Through well logs, pressure measurements, casing integrity

Drilling & Completion Activities

There is no uncontrolled flow to surface (Blow out).

Sufficient barriers exist in casing annulus to prevent crossflow between separate aquifers or hydrocarbon reservoirs.

Relevant government approval obtained for abandonment of any radioactive tool left downhole.

The Drilling Programs for all wells were designed to ensure minimal loss of reservoir and aquifer pressures and minimal contamination of freshwater aquifers.

All four wells were completed for production.






Objective 6 : ( Continued )

( Minimise loss of aquifer pressures and avoid aquifer contamination).

fresh water aquifer cells from contamination and isolate potential and producing formations from formations that may deplete the reservoir pressure when not on production. The following geological formations are aquifers in the Cooper-Eromanga Basins. They may contain permeable sands which may be in natural hydraulic isolation from each other (from shallowest to deepest), and in general isolation will be maintained between these groups:

• Eyre; • Winton, • Mackunda; • Coorikiana; • Cadna-owie; • Murta (including McKinlay

Member)

measurements and corrosion monitoring programs) to assess condition of casing and cross-flow behind casing.

Casing annulus pressures are monitored every 2 years.

The condition of the primary casing barrier is adequate.

For cases where crossflow is detected, a risk assessment incorporating the use of pressure / permeability / salinity data is undertaken in consultation with DLWBC & AAWCMB to determine if lack of cement or poor bond will cause or has caused damaging crossflow which needs to be remediated.

Well Abandonment Activities :

Isolation barriers are set in place to ensure that cross-flow, contamination or pressure reduction will not occur.

Producing, Injection, Inactive and Abandoned Wells

No cross-flow behind casing between aquifers, and between aquifers and hydrocarbon reservoirs unless approved by DWLBC.






• Namur, Adori, • Birkhead, Hutton,

Poolowanna, • Cuddapan; Nappamerri

Group formations, Walkandi and Peera Peera formations

• Toolachee; Daralingie; • Epsilon, Patchawarra or Mt

Toodna or Purni;



• Tirrawarra sandstone or

Stuart Range; Merrimelia; Boorthanna; Crown Point formations and Basement reservoirs.

Note: Crossflow (if it occurs), should not compromise the long term sustainability of a particular

Barriers will be set to meet or exceed the requirements of applicable standards for the decommissioning and abandonment of water bores and abandonment of petroleum wells.

The placement of isolation barriers will in general be to isolate the groups of formations as listed under comments. The number and placement of barriers may be varied






resource.

from this standard approach on a case-by-case basis by SACB Operator personnel using relevant available data and the SA Cooper Basin Water Pressure and Salinity Module Report (2002), and in consultation with DWLBC.






Objective 7: Minimise disturbance to native vegetation and native fauna.

Primary risks to native fauna include clearing of habitat and obstruction of movement through cleared areas, the presence of borrow pits, fuel and chemical storage and management, and waste management activities.

Well Lease and Access Track Construction and Restoration

Proposed well sites, camp sites, access tracks and borrow pit sites have been assessed for rare, vulnerable and endangered flora and fauna species before the commencement of construction.

Consider alternate routes during planning phase to minimise environmental impacts

Facilities (e.g. borrow pits, well cellars) are designed and constructed as far as practicable to minimise fauna entrapment.

Sumps and mud pits are fenced as appropriate to minimise wildlife access

Assessment records are kept and are available for auditing.


Any sites with rare, vulnerable and endangered flora and fauna have been identified and avoided.

0, +1 or +2 GAS criteria are attained for “Minimise impacts on vegetation” objective as listed in Appendix 2, during well lease and access track site selection and construction and for “Re-establish natural vegetation on abandoned well sites and access track”

None of the four wells drilled were located in or near areas of high biological or wilderness values and hence the drilling operations presented no long term impacts to any such areas.

National Parks and Wildlife flora/fauna databases contain no records of vulnerable or endangered species within several kilometres of any of these well sites.

Construction of the access tracks required minimal clearance of vegetation and were aligned to avoid clearing trees.

Each of the sites contained only sparse vegetation, and






Objective 7: ( Continued ) ( Minimise disturbance to native vegetation and native fauna )

In recognised conservation reserves (i.e. Innamincka Regional Reserve) excavations are left in a state as agreed with the responsible statutory body

Borrow pits are restored to minimise water holding capacity, where agreements are not in place with stakeholders.

Waste Management




objective in Appendix 4. Borrow Pits Construction and Restoration 0, +1 or +2 GAS criteria

are attained for “Minimise impacts on vegetation” objective as listed in Appendix 4 during borrow pit site selection and construction, and “Minimise Impact on Vegetation” objective in Appendix 5 for borrow pit restoration.

Waste Management

Refer to assessment criteria for Objective 11.

clearance was minimised. Trees that were present on the site and adjacent to the site were not cleared.

Facilities were designed and constructed to minimise fauna entrapment.

• Borrow pits established for building roads and drill pads will be rehabilitated and restored in accordance with the guidelines set down in PIRSA’s Field Guide for the Environmental Assessment of Abandoned Petroleum Wellsites in the Cooper Basin, South Australia, to attain the highest feasible GAS rating.






Fuel and Chemical Storage and Management

Refer to assessment criteria for Objectives 2 and 4.

• Beach’s Drilling Operations Manual sets out the company’s policy in relation to storage, use and disposal of hazardous material.

• At all well sites, wastes were managed as described in the Drilling & Well Operations EIR.








Objective 8 : Minimise air pollution and greenhouse gas emissions.

Atmospheric emissions occur as a result of standard practices undertaken during drilling and well operations. Emissions of particular environmental significance are: combustion by-

products (eg. oxides of nitrogen, carbon monoxide and sulphur dioxide);

organic carbon and carbon particulates (black smoke); and

flared/vented hydrocarbons (gases).

Well Testing

Conduct well testing in accordance with appropriate industry accepted standards.

Continually review and improve operations.

Appropriate emergency response procedures are in place for the case of a gas leak.

Well Blowdown

Blowdown carried out in accordance with industry accepted standards / good production practice.

Any well that is consistently blown down is identified for a small ID tubing or plunger lift installation to minimise blow downs on that well.

Compliance with EPA requirements.

No well tests or well blow -downs were undertaken during drilling operations at these wells.






Objective 9: ( Maintain and enhance partnerships with the Cooper Basin community. )

The importance of liaison with and contribution to the local community is recognised by the South Australian Cooper Basin Operators. Notification, consultation, contribution to community activities, projects and events and membership of relevant organisations are considered to be key strategies for ensuring partnerships with the local community are enhanced.

Relevant affected parties are notified and consulted on proposed activities.

Forward development plans are presented to the local community.

Local community projects and events are sponsored and supported where appropriate.

Industry membership of appropriate regional land management committees and boards i.e. the Lake Eyre Basin Consultative Council, Marree Soil Conservation Board, and Catchment Committees.

No unresolved reasonable complaints from the community.

Beach maintained regular

contact with landholders and associated stakeholders prior to and while undertaking drilling operations at all well sites.

• Beach sponsors local

community social events including the Innamincka Races.

• Beach also provides

major sponsorship to the Royal Flying Doctor Service on an annual basis.






Objective 10 : Avoid or minimise disturbance to stakeholders and/or associated infrastructure

Communication and the establishment of good relations with stakeholders and community is fundamental to minimising disturbance to as low as practicably possible. Many pastoral properties are certified under the Organic Beef or CattleCare accreditation schemes and therefore may be affected by fuel and chemical storage, moving machinery and contaminated sites.

Induction for all employees and contractors covers pastoral, conservation, legislation and infrastructure issues. Relevant stakeholders are notified prior

to survey and construction of well sites, camp sites and access tracks and undertaking of operations (pursuant to Petroleum Regulations). Borrow pits left open (unrestored) if requested by landholder and upon receipt of letter of transfer of responsibility to landholder.

Gates or cattle grids are installed to a standard, consistent with pastoral infrastructure in fences where crossings are required for access.

No reasonable stakeholder complaints left unresolved.

Beach maintained regular contact with landholders and associated stakeholders prior to and while undertaking drilling operations at each of the well sites.

The access tracks and well sites were located away from tourist routes.

The landowner has

requested that no rehabilitation work be undertaken on any access tracks.

None of the well sites

were located near cattle watering points and cattle







( Avoid or minimise disturbance to stakeholders and/or associated infrastructure.)

All gates left in the condition in which they were found (ie. open/closed).

Potential sources of contamination are fenced as appropriate to prevent stock access.

System is in place for logging landholder complaints to ensure that issues are addressed as appropriate.

Requirements of the Cattle Care and Organic Beef accreditation programs are complied with.

In recognised conservation reserves (i.e. Innamincka Regional Reserve) excavations are left in a state as agreed with the responsible statutory body.

were not present in significant numbers due to prevailing drought conditions.

Each of the wells was

completed as an additional producing well at either the Sellicks or Christies fields. The areas around each well head will be fenced to ensure cattle are not endangered by the operation of the surface equipment..






Objective 11 : Optimise waste reduction and recovery.

Waste reduction requires continual improvements in purchasing, efficiency of use and reuse. Due to the distances involved the costs of recycling a large range of products is not possible however continual review of recycling options is required to ensure that any opportunities are taken advantage of.

Bulk chemical and oil purchasing and use of “bulki bins” or other storage tanks in place for large volume items.

With the exception of drilling fluids, drill cuttings and other fluids disposed during well clean-up, and sewage wastes, all wastes to be disposed of at an EPA licensed facility in accordance with EPA Licence conditions.

Attainment of GAS criteria for “Site left in clean, tidy and safe condition after final clean-up” objective during well site restoration (refer Appendix 4).

Attainment of GAS criteria for “Site left in clean, tidy and safe condition” objective during borrow pit restoration (refer Appendix 5).

Waste was removed from each well site in accordance with Beach’s policy set out in the company’s Drilling Operations Manual.

Non-putrescible waste material (including hazardous material) was stored safely on site for later removal to an EPA approved disposal facility.






Objective 12 : Remediate and rehabilitate operational areas to agreed standards.

Rehabilitation / abandonment plans for surface activities will be developed in consultation with relevant stakeholders

Well Site and Access Track Restoration

Compacted soil areas have been ripped (except on gibber and tablelands) and soil profile and contours are reinstated following completion of operations.

No unresolved

reasonable stakeholder complaints.

Contaminated Site Remediation Contaminated sites are

remediated in accordance with criteria developed with the principles of the National Environment Protection Measure for Contaminated sites and in consultation with the EPA.

• As each of the wells was located beside existing production facilities, restoration of these sites will be incorporated in the rehabilitation of the facility area, when production eventually becomes uneconomic.

• The sites will then be rehabilitated and restored in accordance with the guidelines set down in PIRSA’s Field Guide for the Environmental Assessment of Abandoned Petroleum Wellsites in the Cooper Basin, South Australia to attain the highest feasible GAS






Objective 12 : ( Continued ) Remediate and rehabilitate operational areas to agreed standards.

Well Site and Access Track Restoration The attainment of 0, +1

or +2 GAS criteria for (refer Appendix 4):

- “minimise visual impact of abandoned well sites”

- “minimise visual impact of abandoned access tracks”

- “re-establish natural vegetation on abandoned well sites and access tracks”

rating. .

Any contaminated sites are remediated in accordance with Beach Guidelines and industry standards.

The access tracks to each well will not be rehabilitated, as requested by the landowner.






Borrow Pit Restoration The attainment of 0, +1

or +2 GAS criteria (refer Appendix 5) for :

“minimise impact on vegetation”,

“minimise impact on soil”, “Minimise visual impacts” Note: Well abandonment

issues addressed under objective 6.

Sellicks & Christies Production – Achievement of SEO Objectives – January 2006 to December 2006 APPENDIX V

Page 1 of 10

ACHIEVEMENT OF ENVIRONMENTAL OBJECTIVES ASSOCIATED WITH

PRODUCTION FROM SELLICKS ( PPL 204 ) AND CHRISTIES ( PPL 205 ) FIELDS

FOR PERIOD : 1st JANUARY 2006 TO 31st DECEMBER 2006

Objective Goal Measure / How Objective Achieved Performance Against Objectives

1.1 To minimise disturbance or damage to infrastructure / land use and remediate where disturbance cannot be avoided

Timely notification to adjacent landholders / 3rd party prior to & during new or significant works. Procedures in the POM, EMS and PIRSA guidelines address removal of waste products, re-instatement of soil profiles and rehabilitation. Incident reports

Where disturbance is unavoidable or accidental, infrastructure or land use is restored to as is reasonably appropriate to the original undisturbed condition or as agreed with the landholder

Rehabilitation of the Sellicks and Christies production site will be undertaken in consultation with the landowner when production ceases. No additional land disturbance has been required outside of the area cleared initially for production.

1. To avoid unnecessary disturbance to 3rd party infrastructure, landholders or land use

1.2 To minimise disturbance to landholders

Records of communications with adjacent landholders / 3rd parties Record of disturbance management through appropriate documentation

No unresolved reasonable landholder/3rd party complaints Landholder activities not restricted or disturbed as a result of activities unless by prior arrangement

The facilities are at least 10 kms from the nearest dwelling, which is inhabited only periodically.

2. To maintain soil stability / integrity

2.1 To remediate erosion as a result of production operations in a timely manner

Inspections undertaken as part of regular patrols or following specific works or following significant storm events to look at evidence of erosion, subsidence, vegetation loss & compare to adjacent land Preventative measures implemented and monitored in susceptible areas (eg. monitor for salinisation/erosion effects)

The extent of soil erosion is consistent or less than surrounding land

No significant erosion has been reported either at the facilities or along the access roads.


Page 2 of 10


2.2 To prevent soil inversion

Inspections undertaken as part of regular patrols to look for soil discolouration and the success of vegetation return as an indicator Contractor to indicate top soil/subsoil are stockpiled separately and soil profiles appropriately reinstated following the rehabilitation of earthworks/excavations

Vegetation cover is consistent with surrounding land No evidence of significant subsoil on surface (colour)

Topsoil was stockpiled when the sites were originally cleared for the drilling operations. Rehabilitation of the Sellicks and Christies production sites will be undertaken when production ceases.

2.3 To minimise and remediate soil disturbance

Restrict activities (including vehicle access) to production areas and associated infrastructure and easements Minimise area required for safely undertaking activities in accordance with procedures Planning and assessment of proposed activities to minimise impact Design and construct road with drainage features (e.g. culverts and offtakes) to minimise erosion and sedimentation Rip areas of compacted soil (except on gibber plains and tableland environments Restored borrow pits have topsoil / overburden replaced and pit re-profiled where necessary to prevent erosion Contractor to indicate that soil profiles appropriately reinstated following the rehabilitation of earthworks/excavations

No production activities undertaken on salt lakes, steep tableland land systems or wetlands land systems (as defined in the EIR) Abandoned areas (e.g. borrow pits) are remediated and rehabilitated to be reasonably consistent with the surrounding area 0, +1 or +2 GAS criteria for borrow pit construction and rehabilitation are attained (Appendix B)

All vehicle movements are restricted to the designated access roads and the production facility areas. Sellicks and Christies production sites and access track are located in a dunefield environment. The clay surface on the access roads minimises disturbance to the soil beneath. No significant drainage channels are traversed by either of the access roads to the production sites. The route of the new road for trucking the oil produced from the Christies facility avoids crossing the Cooper Creek. Rehabilitation of the Sellicks and Christies production sites and access tracks will be undertaken in consultation with the landowner when production ceases.


Page 3 of 10


3.1 To maintain regrowth of native vegetation on reinstated areas to be consistent with surrounding area

Disturbance management to facilitate regrowth in rehabilitated areas Follow-up rehabilitation work was undertaken where natural regeneration was inadequate

Species abundance and distribution on the reinstated areas was consistent with the surrounding area Note: assessment of the consistency with surrounding areas will take into account that regrowth is a time and rainfall dependent process 0, +1 or +2 GAS criteria for borrow pit construction and rehabilitation are attained (Appendix B)

Rehabilitation of the Sellicks and Christies production sites will be undertaken in consultation with the landowner when production ceases.

3.2 To minimise additional clearing of native vegetation as part of production activities

Planning and assessment of proposed activities to minimise impact which may include consultation with Native Vegetation Council Avoid significant or priority vegetation and ensure proposed routes have been scouted for significant vegetation and wildlife habitats by appropriately trained and experienced personnel Use existing cleared areas for laydowns and turn-arounds Consideration of sensitive vegetation during vegetation trimming and / or clearing activities Vegetation trimmed rather than cleared where possible Minimise area required for safely undertaking activities in accordance with procedures

Vegetation clearing is limited to previously disturbed areas or areas assessed to be of lowest sensitivity No rare, vulnerable or endangered flora removed without appropriate permits No production activities undertaken on salt lakes, steep tableland land systems or wetlands land systems (as defined in the EIR) 0, +1 or +2 GAS criteria for borrow pit construction and rehabilitation are attained (Appendix B)

Minor vegetation clearing was undertaken during the reporting period at the Christies production facilities to accommodate the new drilling sites for Christies- 4 and 5.

3. To minimise disturbance to native vegetation

3.3 To ensure production activities are planned and conducted in a manner that minimises impacts on native fauna

Planning and assessment of proposed activities to minimise impact In event of earthworks, open trenches are monitored daily and not left open for more than 72 hours

Vegetation clearing is limited to previously disturbed areas or areas assessed to be of lowest sensitivity No rare, vulnerable or endangered fauna removed without appropriate permits 0, +1 or +2 GAS criteria for borrow pit construction and rehabilitation are attained (Appendix B)

No record of rare, vulnerable or endangered fauna in either areas.


Page 4 of 10


3.4 To minimise disturbance of aquatic habitats (specifically wetlands, permanent waterholes and flowing water courses)

Obtain regulatory approval prior to undertaking disturbance in aquatic habitat (contact should be initially made with PIRSA during the planning process) Planning and assessment of proposed activities to minimise impact

Works in aquatic habitats (e.g. flowing watercourses) has been approved by PIRSA

Sellicks and Christies facilities are both approx. 4 kms from the nearest significant watercourse ( Cooper Creek ) which flows only during large flood events ( 1 in 5 years )

4. To prevent the introduction or spread of weeds, pathogens and pest fauna

4.1 To ensure that weeds, pathogens and pest fauna are controlled at a level that is at least consistent with adjacent land

Regular patrols undertaken to look for evidence of weeds on production site and adjacent land (if weeds on production facility or easement but not adjacent land must implement control to prevent spread) Records of outbreaks found, weed control activities and photo-monitoring of significant outbreaks

The presence of weeds and pathogens was consistent with or better than adjacent land No new outbreak or spread of weeds reported

No new outbreak or spread of weeds reported.

5.1 To maintain current surface drainage patterns

Regular patrols undertaken to look for evidence of erosion, abnormal vegetation growth or death Observations are also to be undertaken following significant storm events

For excavations, surface drainage profiles restored to as is reasonably consistent with surrounding area For existing easements, drainage is maintained similar to pre-existing conditions

There are no water courses in the close vicinity of the production facilities, nor crossing the access roads.

5. To minimise the impact of the production operations on water resources

5.2 To minimise impact to aquifers / groundwater volumes and flow patterns

The volume/flow of water extracted is monitored and recorded Water usage is to be reviewed annually and management strategies implemented to reduce overall water usage where practical

Volume of water produced recorded No uncontrolled flow to the surface (i.e. no free flowing bores) Note: the drilling and well operations SEO provides detail on aquifer issues

The volume of water extracted in the production operations is monitored and recorded.


Page 5 of 10


6. To avoid land or water contamination

6.1 To prevent spills occurring and if they occur minimise their impact

All production facilities and flowlines are designed and constructed in accordance with relevant standards Containment of all hazardous substances including hydrocarbons and liquid waste in appropriate vessels and bunds Tanker load-out in lined area, with appropriate bunding to contain spills Roads and causeways designed to minimise risk of vehicle accident and appropriate safety signage installed (e.g. at access to public roads) Fuel and chemical handling and emergency response procedures included in staff training, implemented and reviewed periodically Transport procedures and restrictions to achieve compliance with POM and EMS (including no transport in wet conditions and no wet wheel fording) Implement POM procedures for temporary product storage pits Prevention program including inspection, maintenance and pigging where appropriate Patrols to look for evidence of soil discolouration, vegetation or fauna death Production operations will cease in event of flood inundation. In floodplain land systems, the following will be undertaken:

Storage tanks and flowlines drained, purged and filled with water to reduce buoyancy

Interceptor pit skimmed to remove oil

Fuel tanks drained, engines and all hydrocarbons (e.g. fuel and lubricants) removed off-site

Fencing of contaminated areas if threat is posed to stock or wildlife Incident record system (preventative and post incident review)

No evidence of any spills or leaks to areas not designated to contain spills In the event of a spill, the spill was: Contained Reported Cleaned-up Cause investigated and corrective

and/or preventative action implemented Compliance with the Environment Protection Act, Australian Standard 1940 and the Australian Dangerous Goods Code.

There were no spills outside of the bunded area at either facility.


Page 6 of 10


6.2 To remediate and monitor areas of known contamination arising from production activities (salinisation, hydrocarbons, other production chemicals)

Incident record system (preventative and post incident review) Active remediation methods implemented where it is determined that contamination is spreading or level of contamination is not decreasing Use of groundwater monitoring bores. The number and positioning of monitoring bores will be in accordance with relevant industry practice to ensure adequate coverage of any potential underground water contamination and movement. Use of soil farms for remediation where appropriate

Contamination restricted to known areas and remediation strategies investigated and implemented where practical. Level of hydrocarbon contamination continually decreasing, ultimately to meet Environment Protection Authority (EPA) guidelines1

6.3 To ensure that rubbish and waste material is disposed of in an appropriate manner

Minimise generation of waste where practicable Provide suitable bins for the collection and storage of wastes and collect all waste in one area at each camp site Design and operation of any domestic waste disposal facility in accordance with EPA licence and guidelines Regular patrols undertaken to look for evidence of rubbish, spills (soil discolouration) Appropriately licensed contractors used for any hazardous waste disposal and records are maintained for all hazardous waste disposal All transported waste is adequately secured to the vehicle

No evidence of rubbish or litter on easements or at facilities No evidence that waste material is not contained and disposed of in accordance with Beach approved procedures Evidence of waste tracking certificates for prescribed wastes Evidence of compliance with any waste disposal licence conditions (e.g. EPA permits)

All waste material was disposed of in accordance with Beach approved procedures.

1 Soil Health Index (SHI) study is currently being undertaken by Santos, in consultation with PIRSA and EPA. The results of this study will provide a proforma for establishing site-specific bench

marks for soil remediation.


Page 7 of 10


6.4 To prevent impacts as a result of hydrotest water and waste water (e.g. washdown water) disposal

Water disposed of in a manner that prevented discharge or runoff to watercourses or environmentally sensitive areas Water discharged onto stable ground, with no evidence of erosion as a result of discharge Records on source of water and discharge method/location Use of biocides and toxic chemicals are kept to a minimum and where practicable UV-degradable biocides (e.g. TPHS) shall be used Appropriate assessment of hydrostatic test water quality to determine disposal method Inspection of water disposal sites for evidence of water entering a watercourse or environmentally sensitive area

No evidence of impacts to soil, water and vegetation as a result of water disposal (i.e. soil erosion, dead vegetation, water discoloration)

6.5 To ensure the safe and appropriate disposal of grey water (sullage, sewage)

Compliance with the relevant local government regulations or relevant health and sanitation regulations

No evidence of non-compliance with local or state government regulations

Grey water disposed of in accordance with state government regulations.

6.6 To minimise impacts as a result of produced formation water treatment and disposal and restrict to defined areas

Produced formation water treatment and disposal in accordance with Beach approved procedures in POM and EMS Site ponds appropriately2 to minimise potential impacts Fence contaminated areas if threat is posed to stock or wildlife Monitor evaporation pond water and sludge annually Monitor ponds for surrounding upwelling of PFW Undertake appropriate water quality monitoring where shallow groundwater exists in the vicinity of PFW ponds Records of volumes of produced formation water maintained and reported annually

Water monitoring results indicated levels of Total Petroleum Hydrocarbons (TPH) below 30mg/L in bunded holding ponds and 10mg/L in bunded and / or freeform evaporation ponds No evidence of overflow of product from interceptor pit No evidence of hydrocarbon contamination immediately adjacent to bunded ponds

Produced water from both the Sellicks and Christies facilities well is separated from the oil in separator tanks, and then through a skimmer pond, for final disposal into evaporation ponds. Hydrocarbon levels in the disposed water were monitored and found to be well within the industry standard limits. Integrity of the evaporation ponds at both facilities is checked regularly by the operators based at the Sellicks field.

2 Appropriately manage means to take into consideration and assess relevant environmental factors (including location of surface water, shallow groundwater, potential flooding, location of vegetation,

etc.) and take measures to reduce the potential impact on these factors through the use of best practice.


Page 8 of 10


6.7 To minimise impacts as a result of land treatment units and restrict to defined areas

Land treatment areas constructed and operated in accordance with procedures Records of soil added to land treatment areas to be maintained and reported annually (including quantity, location of source) Monitoring of surrounding soil and groundwater for contaminants annually as required by licence Monitoring and reporting of remediation

Periodic reports as required detail quantity, level of contamination and proposed ongoing operation of the LTU

There are no land treatment units at either Sellicks or Christies. In the event that soil becomes contaminated, it is either treated in situ or taken to a registered soil treatment area.

7. To minimise the risk to public health and safety

7.1 To adequately protect public safety during normal production operations

Risk Assessments and inspections of facilities Use of signage, bunting and traffic management practices to identify all potentially hazardous areas Records of regular emergency response training for employees and review of procedures Incident record system (preventative and post incident review) Development, implementation and periodic review of Emergency Response Plan (ERP) All production facilities and flowlines are designed and constructed in accordance with relevant standards Safety, testing, maintenance and inspection procedures are implemented Personnel are trained to supervise and instruct individuals entering area to conduct work Safe work permits must be obtained to ensure only individuals with proper clearance can conduct works

No injuries or incidents involving the public Demonstrated compliance with relevant standards Emergency procedures implemented and personnel trained

No incidents of risk to public health and safety during the reporting period. The haul roads from both the Christies and Sellicks facilities are not available for use by the public.


Page 9 of 10

7.2 To avoid fires associated with production activities

Incident record system (preventative and post incident review) Regular fire safety and emergency response training for all operations personnel and review of procedures Established procedures for minimising fire risk during operations All production facilities are designed and constructed in accordance with relevant standards Appropriate fire fighting equipment on site

No uncontrolled operations related fires Emergency procedures implemented and personnel trained

No fires occurred at either facility during the reporting period. Landowner ( and government ) have given approval that , in the event of a fire at either facility, if the first attack on the fire fails, it can be left to burn itself out.

7.3 To prevent unauthorised access to production facilities

Use of signage, bunting to identify all potentially hazardous areas Communications with landholders All reports of unauthorized activity are reported and investigated

No unauthorised activity

There were no incidents of unauthorised entry to either the Sellicks or Christies facility.

8.1 To minimise the impact as a result of an emergency situation or incident

Incident record system (preventative and post incident review) Emergency response trials and associated documentation Records of regular emergency response training for all personnel and review of procedures

Emergency response procedures are effectively implemented in the event of an emergency Emergency response exercises are aligned with credible threats and consequences identified in the risk assessment

No emergency situations arose at either the Sellicks or Christies facilities during the reporting period. Beach HSE system includes periodic simulation of Emergency situations at production facilities.

8. Minimise impact of emergency situations

8.2 To restore any damage that may occur as a result of an emergency situation

Refer to previous criteria (Objective 1, 2, 3 & 6) Refer to previous criteria (Objective 1, 2, 3 & 6)

9. To minimise noise due to operations

9.1 To take reasonable practical measures to comply with noise standards

Incident record system (preventative and post incident review) Monitoring results, where deemed necessary (e.g. frequent complaints)

Operational activities have taken reasonable practical measures to comply with noise regulations, under the Environment Protection Act 1993 No unresolved reasonable complaints

Sellicks and Christies facilities are both at least 10 kilometres from the nearest dwelling.

10. To minimise atmospheric emissions

10.1 To minimise uncontrolled atmospheric emissions

Conduct all production activities in accordance with procedures Identify and implement strategies to minimise volume s if needed

Reasonable practical measures implemented in design and operation to minimise emissions

Sources of atmospheric emissions at both Sellicks and Christies are limited to the diesel engines driving the beam pumps or jet pumps on the well heads.


Page 10 of 10

10.2 To minimise controlled atmospheric emissions

Conduct all production activities in accordance with procedures Identify and implement strategies to minimise volumes if needed Record and report annual emission volumes

Reasonable practical measures implemented in design and operation to minimise emissions Annual report includes atmospheric emissions data

10.3 To minimise the generation of dust.

Incident record system (preventative and post incident review) Compliance with procedures (vehicle movement, dust suppression, etc.)

No reasonable complaints received No dust related injuries recorded

Sellicks and Christies facilities are approximately 10 kms from nearest dwelling. Oil is trucked from both facilities to the Tantanna terminal. The clay top haul roads are continually watered and maintained to minimise dust.

11. To adequately protect cultural heritage sites and values during operations and maintenance

11.1 To ensure that identified cultural sites are not disturbed

Consultation with relevant heritage groups if operations occurring outside known surveyed areas Surveys / cultural heritage monitoring before excavations Records of site locations within information systems Site examined by relevant aboriginal claimant group for cultural heritage material prior to work on areas not previously cleared

Proposed construction areas and access tracks surveyed by relevant cultural heritage group Any new sites identified are recorded and reported to appropriate authority No impact to identified sites

A scouting team from the Dieri Aboriginal Corporation ( DAC ) Claimant Group conducted a cultural heritage survey over the sites for the proposed development wells at both Christies and Sellicks.

APPENDIX VII REPORTS TO PIRSA DURING 2006 FOR PPL 210 ( ALDINGA FIELD )

QUARTERLY REPORTS :



31-Dec-05 1-Feb-06

31-Mar-06 1-May-06

30-Jun-06 4-Jul-06

30-Sep-06 31-Oct-06



31-Dec-05 1-Feb-06

31-Mar-06 28-Apr-06

30-Jun-06 28-Jul-06






Filename : 19_Reports to PIRSA_Quarterly_2006_Aldinga

APPENDIX VIII

ANNUAL

COMPLIANCE

REPORT

FOR

PPLA 210 ( ALDINGA )

FOR THE PERIOD



APPENDIX VIII Compliance Report for PPL 210 ( Aldinga ) - Jan 06 to Dec 06

G:\Engineering\Regulatory and Data Management\Reporting\Annual Report to PIRSA for SA PPLs\2006\2006 Production Report_CD for PIRSA\21_PPL 210 Annual Report_2006_Compliance

Report.doc

Introduction Pursuant to Regulation 33 (2) of the 2000 Petroleum Act, Beach Petroleum, as operator of PPL 210 ( Aldinga ) in the Cooper Basin, South Australia, herewith submits its report on the compliance of its oil production operations with :

• the Petroleum Act and the PPL 210 Licence conditions ( Section 1 ),



Section 1 :

Compliance with the Petroleum Act and PPL Licence Conditions There were no instances during the reporting period in which Beach failed to comply with the 2000 Petroleum Act as a consequence of its production operations at the Aldinga field. Section 2 :

Compliance with the Regulations of the Petroleum Act There were no instances during the reporting period in which Beach failed to comply with the Regulations of the 2000 Petroleum Act as a consequence of its production operations at the Aldinga field. Section 3 :

Compliance with Statements of Environmental Objectives ( SEOs ) PIRSA granted PPL 210 to Beach and Magellan Petroleum on December 23rd, 2004. PIRSA’s approval for Beach to be the operator of the Aldinga facility was conditional on Beach committing to achieving the objectives defined in Beach’s “ Statement of Environmental Objectives – Cooper Basin Petroleum Production Operations ( November 2003 ) ”. Beach is satisfied that the production operations at the Aldinga facility have met the objectives required by the SEO, and the spreadsheet below provides comments on the strategies that were employed to achieve this compliance.

Annual Production Report – PPL 210 - Aldinga - Achievement of SEO Objectives –January 2006 to December 2006 APPENDIX IX

Page 1 of 10


PRODUCTION OPERATIONS AT ALDINGA ( PPL 210 )

REPORTING PERIOD : JANUARY 1, 2006 TO DECEMBER 31, 2006





Rehabilitation of the Aldinga production site to be undertaken in consultation with the landowner when production ceases. No additional land disturbance required outside of the area cleared initially for production.





Facility is unmanned. Beach personnel are on site typically only once per week for two to three hours for supervising the loading of a road tanker . The facility is 15 kms from the nearest homestead.





No significant erosion has been reported either at the facility or along the access road.


Page 2 of 10





Topsoil was stockpiled when the site was originally cleared for the drilling operations. Rehabilitation of the Aldinga production site will be undertaken when production ceases.




All vehicle movements are restricted to the designated access road and the production facility area.. Aldinga production site and access track are located in a dunefield environment. The clay surface on the access road minimises disturbance to the soil beneath. No significant drainage channels are traversed by either the access road or the production site. Rehabilitation of the Aldinga production site and access track will be undertaken in consultation with the landowner when production ceases.





Rehabilitation of the Aldinga production site will be undertaken in consultation with the landowner when production ceases.


Page 3 of 10





No vegetation clearing was undertaken during the reporting period. Vegetation along the access track , and in the area of the facility , is quite sparse.




No record of rare, vulnerable or endangered fauna in the area.




Aldinga facility is over 10 kms from the nearest significant watercourse ( Strzelecki Creek ) which flows only during large flood events ( 1 in 5 years ) along the Cooper Creek.


Page 4 of 10










No water courses in the vicinity of the production facility, nor crossing the access road.







Page 5 of 10












Page 6 of 10








Facility is unmanned. Beach personnel are on site typically only once per week for two to three hours when a road tanker is being loaded. Rubbish and waste material taken to Sellicks facility for treatment with Sellicks waste.




Page 7 of 10





There are no waste water handling facilities at Aldinga facility.




Not Applicable.




Production of formation water is minimal – approximately two barrels per day ( 10 litres per hour ) on average. Formation water is separated from the oil through a skimmer tank..




Page 8 of 10





There are no land treatment units at Aldinga. In the event that soil becomes contaminated, it is taken to the Sellicks production facility.





No incidents of risk to public health and safety during the reporting period.


Page 9 of 10




No fires occurred at the facility during the reporting period. Landowner ( and government ) have given approval that , in the event of a fire at the facility, if the first attack on the fire fails, it can be left to burn itself out.




A sign has been placed at the start of the access track to advise that unauthorised entry to the Aldinga facility is prohibited.




No emergency situations arose at the Aldinga facility during the reporting period. Beach HSE system includes periodic simulation of Emergency situations at production facilities.








Aldinga facility is approximately 15 kilometres from the nearest dwelling.





The only source of atmospheric emissions at Aldinga is a single diesel engine driving the beam pump on the Aldinga 1 well.


Page 10 of 10







Aldinga facility is approximately 15 kms from nearest dwelling. Traffic along the access road is typically limited to one road tanker per week.





No instances during the reporting period of any disturbance to cultural heritage sites arising from production activities.

APPENDIX XII REPORTS TO PIRSA DURING 2006 FOR PPL 212 ( KIANA FIELD )

QUARTERLY REPORTS :


31-Dec-05 1-Feb-06

31-Mar-06 1-May-06

30-Jun-06 4-Jul-06

30-Sep-06 31-Oct-06



31-Dec-05 1-Feb-06

31-Mar-06 28-Apr-06

30-Jun-06 28-Jul-06






Filename : 24_Reports to PIRSA_Quarterly_2006_Kiana

APPENDIX XII

ANNUAL

COMPLIANCE

REPORT

FOR

PPL 212 ( KIANA )

FOR THE PERIOD



APPENDIX XII Compliance Report for PPL 212 ( Kiana ) - Jan 06 to Dec 06

G:\Engineering\Regulatory and Data Management\Reporting\Annual Report to PIRSA for SA PPLs\2006\2006 Production Report_CD for PIRSA\26_PPL 212 _Kiana_ Annual

Report_2006_Compliance Report.doc

Introduction Pursuant to Regulation 33 (2) of the 2000 Petroleum Act, Beach Petroleum, as operator of PPL 212 ( Kiana ) in the Cooper Basin, South Australia, herewith submits its report on the compliance of its oil production operations with :

• the Petroleum Act and the PPL 210 Licence conditions ( Section 1 ),



Section 1 :

Compliance with the Petroleum Act and PPL Licence Conditions There were no instances during the reporting period in which Beach failed to comply with the 2000 Petroleum Act as a consequence of its production operations at the Kiana field. Section 2 :

Compliance with the Regulations of the Petroleum Act

A) Drilling Operations During the reporting period, one development well, Kiana-2 was drilled in PPL 204. There were no instances in which Beach failed to comply with the Regulations of the 2000 Petroleum Act as a consequence of these development drilling operations .

• Notifications for Kiana-2 Operations The attached table “Checklist for Notifications of Drilling Operations”. Summarises the compliance achieved in issuing the relevant notifications to stakeholders. Whilst the notification of the proposed drilling operations for Kiana-2 was provided at the appropriate time, the notification of the commencement of the earthworks was not provided in the time frame required by the Regulations. The landowner was given notification only one week prior to the commencement of the earthworks, rather than the 21 day period required by the Regulations. This late notification represents a non-compliance.




• Reports for Kiana-2 The attached table “Checklist for Submission of Drilling Reports ” summarises the compliance achieved in submitting reports and data associated with the drilling of the Kiana-2. B) Seismic Operations There were no seismic operations on PPL 212 ( Kiana ) during the reporting period. Section 3 :

Compliance with Statements of Environmental Objectives ( SEOs ) 3A. Drilling Operations Government approval for Beach to drill the Kiana-2 well was conditional on Beach committing to achieving the objectives defined in the “Statement of Environmental Objectives for Drilling and Well Operations in the Cooper / Eromanga Basins – South Australia ( SEO )“. Kiana-2 was plugged and abandoned after intersecting no zones with potential for the recovery of commercial quantities of hydrocarbons. The assessment of Beach’s performance in achieving the SEO objectives cannot be completed until the well site has been rehabilitated, when the sump pits have fully dried out and earthmoving machinery is available in the area.. The access track to the Kiana-2 well was approximately 1400 hundred metres in length and traversed two land holdings. Beach will discuss with both landowners the level of rehabilitation they require on the track. Beach was satisfied that it has met all the other objectives required by the SEO for the drilling operations on these wells, and the spreadsheet below ( attached as Appendix XIII ) summarises the strategies that were employed to achieve this compliance on each of the wells. 3B. Seismic Operations There were no seismic operations on PPL 212 ( Kiana ) during the reporting period.




3C. Production Operations PIRSA granted PPL 212 to Beach, Great Artesian Oil and Gas, and Magellan Petroleum on January 23rd, 2006. PIRSA’s approval for Beach to be the operator of the Kiana facility was conditional on Beach committing to achieving the objectives defined in Beach’s “ Statement of Environmental Objectives – Cooper Basin Petroleum Production Operations ( November 2003 ) ”. Beach is satisfied that the production operations at the Kiana facility have met the objectives required by the SEO, and the spreadsheet below ( attached as Appendix XIV ) provides comments on the strategies that were employed to achieve this compliance.


PERMIT : PPL 212 ( Kiana Field ) PERIOD : 1 January 2006 - 31st December 2006 PAGE 1

Well Name : Kiana -2 Commenced Drilling Operations : 1st October 2006 Completed Drilling Operations : 18th October 2006

REQUIREMENT Person / agency to whom Notification is to be provided


Comments


PIRSA / Mike Malavazos 21 days prior to proposed start date 10-Sep-06 7-Sep-06 Exploration Manager Notification period is reduced to 21 days as a result of PIRSA granting Beach Low Supervision classification.



late August 7-Sep-06 Exploration Manager Non-compliance : Earthworks started in mid September - prior to the end of the required 21 day Notification period.

Notification to landowner (s) Pastoral Lessee; 21 days prior to proposed start date 10-Sep-06 6-Sep-06 Exploration Manager G. Overton _Mulka T. Whitelaw - Gidgealpa . NOTE : Non-compliance : Advance notification to landowners re commencement of earthworks was approximately one week. Regulations require 3 weeks.

National Parks; 21 days prior to proposed start date 10-Sep-06 7-Sep-06 Exploration Manager John Watkins, NPWS

Native Title Claimant(s); 21 days prior to proposed start date 10-Sep-06 7-Sep-06 Exploration Manager Dieri & ALRM


21 days prior to proposed start date 10-Sep-06 7-Sep-06 Exploration Manager

Santos - T. Whitelaw


PERMIT : PPL 212 ( Kiana Field ) PERIOD : 1 January 2006 - 31st December 2006 PAGE 1

Well Name : Kiana -2 Commenced Drilling Operations : 1st October 2006 Completed Drilling Operations : 18th October 2006



Comments



Exploration Manager

Wireline logs PIRSA Within 2 months of acquisition of data. 11-Dec-06 9-Jan-07 Exploration Manager Non-Compliance : Log data submitted 4 weeks overdue. Logs run on 11th October.




Exploration Manager

Well samples PIRSA Within 6 months of rig release. 18-Apr-07 Exploration Manager Rig released 18th October


PIRSA Within 6 months of rig release. 18-Apr-07 Exploration Manager



Exploration Manager


NOT DUE FOR SUBMISSION UNTIL 2007

ASSESSMENT OF BEACH PETROLEUM’S PERFORMANCE IN ACHIEVING APPENDIX XIII THE ENVIRONMENTAL OBJECTIVES DEFINED IN THE COOPER BASIN DRILLING SEO

PPL No. : 212 YEAR : 2006 WELL NAME : Kiana-2



Page 1 of 27 G:\Engineering\Regulatory and Data Management\Reporting\Annual Report to PIRSA for SA PPLs\2006\2006 Production Report_CD for PIRSA\29_Production Annual Report - 2006_Audit_Drilling SEO_Kiana-2.doc

Objective 1: Minimise the risk to public and other third parties.

The criteria for assessing the achievement of this objective have been developed on the basis of the current understanding of the risks associated with drilling and well operations.

The key to achieving this objective in relation to both downhole abandonment and surface well site restoration is to ensure that the visual prominence of the abandoned well site and its access track(s) is minimised to the extent where it is difficult for third parties to detect and therefore access these sites.


personnel complete a safety induction prior to commencement of work in the field.


personnel undertake a refresher induction every 2 years.

Signage in place to warn third

parties of access restrictions to operational areas, with particular warnings when potentially dangerous operations are being undertaken.

Permit to work systems in place for

Reasonable measures implemented to ensure no injuries to the public or third parties.

The design and operation of the well was undertaken in accordance with Beach safety policies, standards and guidelines.

The well was located at the end of a purpose built access track which commenced from the Santos Moomba – Tantanna haul road, which tourists are not permitted to use.

As further precaution the access track was signposted to advise that entry to the well site was for authorised personnel only.

All employees undertook a safety induction prior to commencing work in the field and they undertake refresher






staff and contractors in dangerous situations.

courses if/when required.

Beach Permit to Work system was in operation during the drilling operations to control potentially dangerous situations.

Objective 1: ( Continued )

.

The backfilling of the well cellar and the removal of rubbish from the restored well site should be carried out

Fires or explosions at well sites could result in complications resulting in a spill of production fluids (formation water and hydrocarbon), atmospheric emissions, disturbance of native vegetation and wildlife habitat, loss of reservoir pressure, and risk to

Reporting systems for recording

injuries and accidents in place, and annual; (at minimum) review of records to determine injury trends. Implementation of appropriate corrective actions.

Ensuring safety management plans

are updated and reviewed. All appropriate PPE (personnel

protective equipment) is issued and available as required in accordance with company operating requirements and

Accident / incident reporting systems were in place as defined in the Beach Drilling Operation Manual. Records are reviewed regularly to assess trends.

Beach safety management plans are updated and reviewed on a regular basis.

Appropriate PPE was issued to all personnel involved in the






employees, contractors and the public.

applicable standards.

drilling operations.


The movement of heavy equipment associated with rig moves present a risk to the safety of employees, contractors and third parties (ie tourists).

Effective Emergency Response

Plan (ERP) and procedures are in place in the event of a fire or explosion.

Annual exercise of ERP.

Communication of rig moves and

other potential hazards to safety associated with drilling and well operations to potentially affected parties prior to commencement of operations.

An Emergency Response Plan (ERP) Bridging document was prepared for the drilling operations at each well and all personnel involved in the operations were aware of the Emergency Response Plan. However, no situation arose that required the implementation of the Plan.

Beach undertakes regular ERP exercises at selected drilling operations.

Beach maintained regular contact with landholders and associated stakeholders during the drilling operations at teach site.






Objective 2 : Minimise disturbance and avoid contamination to soil.

The impacts associated with soil disturbance can potentially include wind and water erosion and dust generation. The main source of disturbance to soils is associated with lease and access track construction, creation of borrows pits, restoration activity, vehicle movement in off-road locations and sub-surface excavations (i.e. sumps, flare pits and borrow pits).

Well Site and Access Track Construction Consider alternate routes during

planning phase to minimise environmental impacts

Gibber mantle on access tracks and well sites (excluding sumps) has not been removed, only rolled, during construction and restoration on gibber and tableland land systems.

Topsoil stockpiled (including gibber mantle) from sump construction and respread on abandonment.

The need to traverse sensitive land systems and the methods of managing the impacts should be justified in accordance with company procedures, recorded and available for auditing.

Well Site and Access Track Construction 0, +1 or +2 GAS criteria

are attained for “Minimise visual impacts of abandoned well sites and access tracks” objective as listed in Appendix 4 for well lease and access track construction.

No unauthorised off-road driving or creation of shortcuts.

No construction activities are carried out on salt lakes, steep tableland land systems or wetlands land systems (as defined in EIR).

• Drilling lease was constructed in accordance with the guidelines outlined in Guidelines for Lease Construction and Restoration.

• No section of the access track traversed gibber mantle.

• Topsoil was stockpiled for subsequent respreading when restoration activities are conducted.

• Vehicle movements were strictly limited to the defined access track and well pad area – areas which had been given cultural heritage clearance for the drilling operations.








Production Testing / Well Blowdowns If appropriate use:

- impermeable flare pit - flare tanks.

Borrow pit construction and

restoration 0, +1 or +2 GAS criteria

are attained for “Minimise Visual Impacts for constructing borrow pits” objective as listed in Appendix 3, and “Minimise visual

• The sites will then be rehabilitated and restored in accordance with the guidelines set down in PIRSA’s Field Guide for the Environmental Assessment of Abandoned Petroleum Wellsites in the Cooper Basin, South Australia to attain the highest feasible GAS rating. .

• Borrow pits will be rehabilitated and restored in accordance with the guidelines set down in PIRSA’s Field Guide for the Environmental Assessment of Abandoned Petroleum Wellsites in the Cooper Basin, South Australia, to attain the highest feasible GAS rating.

• All fuel, oil and chemicals were stored in accordance








impacts” and “Minimise impact on soil” objectives as listed in Appendix 5.

Production Testing / Well Blowdowns No soil contamination as

a result of production testing or well blowdown operations.

with relevant standards.

• Refuelling was undertaken as per Drilling Contractors’ procedures.

• There were no spills during the drilling operations that required reporting or corrective action to be taken in accordance with the Beach Incident Reporting system.

Objective 2:




Fuel and Chemical Storage and Handling No spills/leaks outside of


Level of hydrocarbon continually decreasing for in situ remediation of spills.








( Continued)




Logged incidents are reviewed

annually to determine areas that may require corrective action in order to reduce spill volumes in subsequent years (and drive continual improvement).




Oil spill contingency plan (reviewed annually) is up to date with specific scenarios relating to spills to creeks and floodplain areas.

Soils remediated to a level as determined by the SHI process.












Waste Disposal (domestic, sewage and sludges)



All domestic wastes are

disposed of in accordance with EPA licensing requirements.

0, +1 or +2 GAS criteria for ‘Waste material’ objective is attained.

• Wastes were managed as described in the Cooper Basin Drilling & Well Operations EIR.

• Wastes were collected, stored and transported in







No spills or leaks from sewage treatment process and sludge pits.

covered bins / containers.


Objective 3 : Avoid the introduction or spread of pest plants and animals and implement control measures as necessary.

Activity associated with lease and access track construction, such as movement of vehicles and equipment, is a potential source of weed or disease introduction and spread. The most effective technique to prevent the introduction and spreading of weed species is to ensure that vehicles and equipment are appropriately cleaned prior to entry into a construction site.

Where appropriate a weed and feral

animal management strategy is in place (avoidance and control strategies).

Rig and vehicle wash downs are initiated in accordance with the management strategy.

No weeds or feral

animals are introduced to operational areas.

• Drilling rig and associated equipment and vehicles had already been working in the Cooper Basin prior to commencing these drilling operations .






Objective 4 : Minimise disturbance to drainage patterns and avoid contamination of surface waters and shallow ground water resources.

The main threats to drainage patterns and surface waters, and shallow ground waters are considered to be interruption of natural flows as a result of earthworks and contamination.

Access track and well site selection should aim to minimise impact to drainage systems, by avoiding sensitive areas and appropriate construction methods to avoid windrows.


All drill cuttings, muds and non toxic drill fluids are contained within the designated mud sumps with adequate freeboard at the completion of operations to allow for a 1m cover of clean fill at remediation.

Well Lease and Access Track Construction

Well leases and access tracks are located and constructed to maintain pre-existing water flows (i.e. channel contours are maintained on floodplains and at creek crossings).


No overflow of drill cuttings, muds and other drilling fluids from mud sumps.

No waste material disposal to sumps and flare pits.

• The well site was not located in an area where flooding from local watercourses was likely to occur.

• The drill pad and access track were constructed and located to avoid the possibility of flood waters diverting from their natural direction of drainage in the event of local inundation.

• The drill cuttings, muds, and non toxic drill fluids were contained within designated mud sumps with adequate freeboard at the completion of operations to allow for a 1m cover of clean fill at remediation.






Objective 4 : ( Continued)

( Minimise disturbance to drainage patterns and avoid contamination of surface waters and shallow ground water resources. )

There is potential for the contamination of chemical and fuel storage areas, from oil and gas systems at well heads, during transportation of fuel and chemicals and during transportation of wastes. Localised contamination may result from spills or leaks of well operations chemicals (eg. corrosion inhibitors) during storage and handling.

Well Heads (Oil and Gas Systems) Where appropriate, imperviously

lined well cellars are installed on oil wells.

Chemical containment devices are installed on gas well skids.

Well heads shut in and chemicals removed prior to flood events.

Jet pumps are installed within containment device with an adequately sized containment sump.

Well Heads (Oil and Gas Systems) No leaks/spills outside of


• Kiana-2 was plugged and abandoned.

Well Blowdown / Production Testing Activity is conducted in accordance

with accepted industry standards / good oilfield practice.

If appropriate use: - impermeable flare pit - flare tanks - separators - supervision

Well Blowdown/Production Testing No water (surface or

groundwater) contamination as a result of production testing or well blowdown operations.






Objective 4 ( Continued )

( Minimise disturbance to drainage patterns and avoid contamination of surface waters and shallow ground water resources. )





Logged incidents are reviewed annually to determine areas that may require corrective action in order to reduce spill volumes in subsequent years (and drive continual improvement).


Fuel/Chemical Storage and Handling No leaks/spills outside of


• Specific oil spill containment / cleanup materials were on site at all times.

• All fuel, oil and chemicals were in accordance with relevant standards

Refuelling was undertaken as per Drilling Contractors’ procedures.








Objective 4 cont : ( Minimise disturbance to drainage patterns and avoid contamination of surface waters and shallow ground water resources. )

The major threat of spills is the threat to soil, vegetation and watercourses directly impacted by the spill. Therefore, the achievement of this objective also consequently contributes to the achievement of Objectives 2 and 7 in relation to minimising the impacts on soil and natural habitats.

Avoidance of spills will be paramount in areas where the spill can be potentially spread beyond the immediate confines of the spill area into sensitive environments such as creeks and wetlands.



Oil spill contingency plan (reviewed

annually) is up to date with specific scenarios relating to spills to creeks and floodplain areas.










Objective 5 :

Avoid disturbance to sites of cultural and heritage significance.

The aim of the objective is to ensure that any sites of cultural (Aboriginal or non-Aboriginal) heritage significance are identified and protected.

Consultation with stakeholders (i.e. government agencies, landholders etc) in relation to the possible existence of heritage sites, as necessary.

Heritage report forms completed for any sites or artefacts identified, and report forms forward to the Department of State Aboriginal Affairs (DOSAA).

Survey records are kept and are available for auditing.

Areas requiring remediation which lie outside previously surveyed sites should be surveyed in accordance with company heritage clearance procedures.

Proposed well sites and access tracks have been surveyed and any sites of Aboriginal and non-Aboriginal heritage identified.

Any identified cultural and heritage sites have been avoided.

Note:

Where a negotiated agreement or determination for heritage clearance is in place, compliance with the negotiated agreement or determination takes precedence over the above criteria.

Beach have an agreement with the Dieri Aboriginal Corporation Native Title Claimant group which specifies the requirements for scouting proposed wells and access tracks to identify and avoid areas of heritage value and archaeological significance.

Joint site visits were carried out with the Native Title Claimant group. The proposed drilling location and access routes was agreed and given heritage clearance.

Areas of significance were recorded and marked as exclusion zones.






Objective 6 : Minimise loss of aquifer pressures and avoid aquifer contamination.

This objective seeks to protect the water quality and water pressure of aquifers that may potentially be useful as water supplies, and to maintain pressure in sands that may host petroleum accumulations elsewhere. To address this objective, the risks of cross flow between aquifer cells known to be permeable and in natural hydraulic isolation from each other, or where there is insufficient information to determine that they are permeable or in hydraulic communication, must be assessed on a case by case basis and procedures implemented to minimize the fresh water aquifer cells from contamination and isolate

Drilling & Completion Activities :

A competent cement bond between aquifer and hydrocarbon reservoirs is demonstrated. For cases where isolation of these formations is not established, a risk assessment incorporating the use of pressure / permeability / salinity data is undertaken in consultation with DLWBC & AAWCMB to determine if lack of cement or poor bond will cause or has caused damaging crossflow which needs to be remediated.

Producing, Injection and, Inactive Wells

Monitoring programs implemented (eg. Through well logs, pressure measurements, casing integrity measurements and corrosion monitoring programs) to assess

Drilling & Completion Activities

There is no uncontrolled flow to surface (Blow out).

Sufficient barriers exist in casing annulus to prevent crossflow between separate aquifers or hydrocarbon reservoirs.

Relevant government approval obtained for abandonment of any radioactive tool left downhole.

The Drilling Program for the Kiana-2 well was designed to ensure minimal loss of reservoir and aquifer pressures and minimal contamination of freshwater aquifers.








potential and producing formations from formations that may deplete the reservoir pressure when not on production. The following geological formations are aquifers in the Cooper-Eromanga Basins. They may contain permeable sands which may be in natural hydraulic isolation from each other (from shallowest to deepest), and in general isolation will be maintained between these groups:

• Eyre; • Winton, • Mackunda; • Coorikiana; • Cadna-owie; • Murta (including McKinlay

Member) • Namur, Adori, • Birkhead, Hutton,

Poolowanna, • Cuddapan; Nappamerri

condition of casing and cross-flow behind casing.

Casing annulus pressures are monitored every 2 years.

The condition of the primary casing barrier is adequate.

For cases where crossflow is detected, a risk assessment incorporating the use of pressure / permeability / salinity data is undertaken in consultation with DLWBC & AAWCMB to determine if lack of cement or poor bond will cause or has caused damaging crossflow which needs to be remediated.

Well Abandonment Activities :

Isolation barriers are set in place to ensure that cross-flow, contamination or pressure reduction will not occur.

Producing, Injection, Inactive and Abandoned Wells

No cross-flow behind casing between aquifers, and between aquifers and hydrocarbon reservoirs unless approved by DWLBC.






Group formations, Walkandi and Peera Peera formations

• Toolachee; Daralingie; • Epsilon, Patchawarra or Mt

Toodna or Purni;



• Tirrawarra sandstone or

Stuart Range; Merrimelia; Boorthanna; Crown Point formations and Basement reservoirs.

Note: Crossflow (if it occurs), should not compromise the long term sustainability of a particular resource.

Barriers will be set to meet or exceed the requirements of applicable standards for the decommissioning and abandonment of water bores and abandonment of petroleum wells.

The placement of isolation barriers will in general be to isolate the groups of formations as listed under comments. The number and placement of barriers may be varied from this standard approach on a case-by-case basis by SACB Operator personnel using relevant available data and the SA Cooper Basin Water Pressure and Salinity Module Report (2002), and in consultation with DWLBC.






Objective 7: Minimise disturbance to native vegetation and native fauna.

Primary risks to native fauna include clearing of habitat and obstruction of movement through cleared areas, the presence of borrow pits, fuel and chemical storage and management, and waste management activities.


Proposed well sites, camp sites, access tracks and borrow pit sites have been assessed for rare, vulnerable and endangered flora and fauna species before the commencement of construction.

Consider alternate routes during planning phase to minimise environmental impacts

Facilities (e.g. borrow pits, well cellars) are designed and constructed as far as practicable to minimise fauna entrapment.

Sumps and mud pits are fenced as appropriate to minimise wildlife access

Assessment records are kept and are available for auditing.

In recognised conservation reserves (i.e. Innamincka Regional Reserve)


Any sites with rare, vulnerable and endangered flora and fauna have been identified and avoided.

0, +1 or +2 GAS criteria are attained for “Minimise impacts on vegetation” objective as listed in Appendix 2, during well lease and access track site selection and construction and for “Re-establish natural vegetation on abandoned well sites and access track” objective in Appendix 4.

The location of the Kiana-2 well is not in or near areas of high biological or wilderness values and hence the drilling operations presented no long term impacts to any such areas.

National Parks and Wildlife flora/fauna databases contain no records of vulnerable or endangered species within several kilometres of any of these well sites.

Construction of the access tracks required minimal clearance of vegetation and were aligned to avoid clearing trees.

Each of the sites contained only sparse vegetation, and clearance was minimised. Trees that were present on the






Objective 7: ( Continued ) ( Minimise disturbance to native vegetation and native fauna )

excavations are left in a state as agreed with the responsible statutory body

Borrow pits are restored to minimise water holding capacity, where agreements are not in place with stakeholders.

Waste Management




Borrow Pits Construction and Restoration 0, +1 or +2 GAS criteria

are attained for “Minimise impacts on vegetation” objective as listed in Appendix 4 during borrow pit site selection and construction, and “Minimise Impact on Vegetation” objective in Appendix 5 for borrow pit restoration.

Waste Management

Refer to assessment criteria for Objective 11.

Fuel and Chemical Storage

site and adjacent to the site were not cleared.

Facilities were designed and constructed to minimise fauna entrapment.

• Borrow pits established for building the access road and drill pad will be rehabilitated and restored in accordance with the guidelines set down in PIRSA’s Field Guide for the Environmental Assessment of Abandoned Petroleum Wellsites in the Cooper Basin, South Australia, to attain the highest feasible GAS rating.

• Beach’s Drilling Operations Manual sets out the company’s policy in relation






and Management

Refer to assessment criteria for Objectives 2 and 4.

to storage, use and disposal of hazardous material.

• At all well sites, wastes were managed as described in the Drilling & Well Operations EIR.








Objective 8 : Minimise air pollution and greenhouse gas emissions.

Atmospheric emissions occur as a result of standard practices undertaken during drilling and well operations. Emissions of particular environmental significance are: combustion by-

products (eg. oxides of nitrogen, carbon monoxide and sulphur dioxide);

organic carbon and carbon particulates (black smoke); and

flared/vented hydrocarbons (gases).

Well Testing

Conduct well testing in accordance with appropriate industry accepted standards.

Continually review and improve operations.

Appropriate emergency response procedures are in place for the case of a gas leak.

Well Blowdown

Blowdown carried out in accordance with industry accepted standards / good production practice.

Any well that is consistently blown down is identified for a small ID tubing or plunger lift installation to minimise blow downs on that well.

Compliance with EPA requirements.

Two DSTs were undertaken with no significant recovery of hydrocarbons.






Objective 9: ( Maintain and enhance partnerships with the Cooper Basin community. )

The importance of liaison with and contribution to the local community is recognised by the South Australian Cooper Basin Operators. Notification, consultation, contribution to community activities, projects and events and membership of relevant organisations are considered to be key strategies for ensuring partnerships with the local community are enhanced.

Relevant affected parties are notified and consulted on proposed activities.

Forward development plans are presented to the local community.

Local community projects and events are sponsored and supported where appropriate.

Industry membership of appropriate regional land management committees and boards i.e. the Lake Eyre Basin Consultative Council, Marree Soil Conservation Board, and Catchment Committees.

No unresolved reasonable complaints from the community.

Beach maintained regular

contact with landholders and associated stakeholders prior to and while undertaking drilling operations at Kiana-2.

• Beach sponsors local

community social events including the Innamincka Races.

• Beach also provides

major sponsorship to the Royal Flying Doctor Service on an annual basis.






Objective 10 : Avoid or minimise disturbance to stakeholders and/or associated infrastructure

Communication and the establishment of good relations with stakeholders and community is fundamental to minimising disturbance to as low as practicably possible. Many pastoral properties are certified under the Organic Beef or CattleCare accreditation schemes and therefore may be affected by fuel and chemical storage, moving machinery and contaminated sites.

Induction for all employees and contractors covers pastoral, conservation, legislation and infrastructure issues. Relevant stakeholders are notified prior

to survey and construction of well sites, camp sites and access tracks and undertaking of operations (pursuant to Petroleum Regulations). Borrow pits left open (unrestored) if requested by landholder and upon receipt of letter of transfer of responsibility to landholder.

Gates or cattle grids are installed to a standard, consistent with pastoral infrastructure in fences where crossings are required for access.

All gates left in the condition in which they were found (ie. open/closed).

No reasonable stakeholder complaints left unresolved.

Beach maintained regular contact with landholders and associated stakeholders prior to and while undertaking drilling operations at Kiana-2.

The access track and well site were located away from tourist routes.

Kiana-2 was not located

near cattle watering points and cattle were not present in significant numbers due to prevailing drought conditions.

• Kiana-2 was plugged and abandoned







( Avoid or minimise disturbance to stakeholders and/or associated infrastructure.)

Potential sources of contamination are fenced as appropriate to prevent stock access.

System is in place for logging landholder complaints to ensure that issues are addressed as appropriate.

Requirements of the Cattle Care and Organic Beef accreditation programs are complied with.

In recognised conservation reserves (i.e. Innamincka Regional Reserve) excavations are left in a state as agreed with the responsible statutory body.






Objective 11 : Optimise waste reduction and recovery.

Waste reduction requires continual improvements in purchasing, efficiency of use and reuse. Due to the distances involved the costs of recycling a large range of products is not possible however continual review of recycling options is required to ensure that any opportunities are taken advantage of.

Bulk chemical and oil purchasing and use of “bulki bins” or other storage tanks in place for large volume items.

With the exception of drilling fluids, drill cuttings and other fluids disposed during well clean-up, and sewage wastes, all wastes to be disposed of at an EPA licensed facility in accordance with EPA Licence conditions.

Attainment of GAS criteria for “Site left in clean, tidy and safe condition after final clean-up” objective during well site restoration (refer Appendix 4).

Attainment of GAS criteria for “Site left in clean, tidy and safe condition” objective during borrow pit restoration (refer Appendix 5).

Waste was removed from each well site in accordance with Beach’s policy set out in the company’s Drilling Operations Manual.

Non-putrescible waste material (including hazardous material) was stored safely on site for later removal to an EPA approved disposal facility.






Objective 12 : Remediate and rehabilitate operational areas to agreed standards.

Rehabilitation / abandonment plans for surface activities will be developed in consultation with relevant stakeholders

Well Site and Access Track Restoration

Compacted soil areas have been ripped (except on gibber and tablelands) and soil profile and contours are reinstated following completion of operations.

No unresolved

reasonable stakeholder complaints.

Contaminated Site Remediation Contaminated sites are

remediated in accordance with criteria developed with the principles of the National Environment Protection Measure for Contaminated sites and in consultation with the EPA.

Well Site and Access Track Restoration The attainment of 0, +1

or +2 GAS criteria for

• The Kiana-2 site will be rehabilitated and restored in accordance with the guidelines set down in PIRSA’s Field Guide for the Environmental Assessment of Abandoned Petroleum Wellsites in the Cooper Basin, South Australia to attain the highest feasible GAS rating. .

Any contaminated sites are remediated in accordance with Beach Guidelines and industry standards.






Objective 12 : ( Continued ) Remediate and rehabilitate operational areas to agreed standards.

(refer Appendix 4): - - “minimise visual

impact of abandoned well sites”

- “minimise visual impact of abandoned access tracks”

- “re-establish natural

vegetation on abandoned well sites and access tracks”

Borrow Pit Restoration The attainment of 0, +1

or +2 GAS criteria (refer Appendix 5) for :

“minimise impact on vegetation”,

“minimise impact on soil”, “Minimise visual impacts” Note: Well abandonment

issues are addressed under objective 6.

The access track traverses two properties. Beach will discuss with both landowners the level of rehabilitation that they require for the track.

Kiana Production – Achievement of SEO Objectives – January 2006 to December 2006 APPENDIX XIV

Page 1 of 10


PRODUCTION FROM KIANA ( PPL 212 ) FIELD

FOR PERIOD : 1st JANUARY 2006 TO 31st DECEMBER 2006





Rehabilitation of the Kiana production site will be undertaken in consultation with the landowner when production ceases. No additional land disturbance has been required outside of the area cleared initially for production.





The facilities are at least 20 kms from the nearest dwelling.





No significant erosion has been reported either at the facilities or along the access roads.


Page 2 of 10





Topsoil was stockpiled when the sites were originally cleared for the drilling operations. Rehabilitation of the Kiana production sites will be undertaken when production ceases.




All vehicle movements are restricted to the designated access roads and the production facility areas. Kiana production sites and access track are located in a dunefield environment. The clay surface on the access roads minimises disturbance to the soil beneath. No significant drainage channels are traversed by either of the access roads to the production site. Rehabilitation of the Kiana production site and access tracks will be undertaken in consultation with the landowner when production ceases.





Rehabilitation of the Kiana production sites will be undertaken in consultation with the landowner when production ceases.


Page 3 of 10





Minor vegetation clearing was undertaken during the reporting period at the Kiana production facility to accommodate the new drilling site for Kiana-2.




No record of rare, vulnerable or endangered fauna in either areas.




Kiana facility is approx. 50 kms from the nearest significant watercourse ( Cooper Creek ) which flows only during large flood events ( 1 in 5 years )


Page 4 of 10










There are no water courses in the close vicinity of the production facilities, nor crossing the access roads.







Page 5 of 10











There were no spills outside of the bunded areas at the facility.


Page 6 of 10








All waste material was disposed of in accordance with Beach approved procedures.




Page 7 of 10








The Kiana facility has no accommodation facilities and no running water..




Water produced from the Kiana -1 well is separated from the oil in a separator tank, and then through a skimmer pond, for final disposal into an evaporation pond. Hydrocarbon levels in the disposed water were monitored and found to be well within the industry standard limits. The integrity of the evaporation pond at the facilty is checked regularly by the operators based at the Sellicks field.




Page 8 of 10





There are no land treatment units at the Kiana facility. In the event that soil becomes contaminated, it is either treated in situ or taken to a registered soil treatment area.





No incidents of risk to public health and safety during the reporting period. The short ( one kilometre ) haul road from the Kiana facility is not available for use by the public.


Page 9 of 10




No fires occurred at either facility during the reporting period. Landowner ( and government ) have given approval that , in the event of a fire at either facility, if the first attack on the fire fails, it can be left to burn itself out.




There were no incidents of unauthorised entry to the Kiana facility.




No emergency situations arose at the Kiana facility during the reporting period. Beach HSE system includes periodic simulation of Emergency situations at production facilities.








Kiana facility is at least 20 kilometres from the nearest dwelling.





Sources of atmospheric emissions at Kiana are limited to the diesel engine driving the beam pump or jet pump on the well head..


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Kiana facility is at least 20 kilometres from the nearest dwelling. Oil is trucked from the facility to the Tantanna terminal. The clay top haul road is continually watered and maintained to minimise dust.





A scouting team from the Dieri Aboriginal Corporation ( DAC ) Claimant Group conducted a cultural heritage survey over the site for the Kiana-2 development well.

oil production operations -...

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