SMH Story Beach Energy shares jump on resource estimate August 10, 2011 - 12:19PM
Shares in Beach Energy rose after the oil and gas producer reported a strong resource estimate for its Holdfast-1 and Encounter-1 shale gas wells in the Cooper Basin, South Australia.
Beach shares were up 7.5 cents, or 8.15 per cent, at 99.5 cents at 1157 AEST after reaching an earlier high of $1.03.
The company on Wednesday booked an initial gross contingent resource for the wells of two trillion cubic feet of sales gas.
Advertisement: Story continues below "Contingent" resources are in the mid-range category of Australia's oil and gas reporting code and are considered potentially recoverable from known accumulations. However they are not yet commercially recoverable.
"This resource booking equates to in excess of 330 million barrels of oil equivalent, or approximately five times Beach's 30 June 2010 reserves figure," Beach said in a statement.
Reserves are the highest category of the code and are deemed to be commercially recoverable.
The Holdfast-1 and Encounter-1 resource estimate will contribute to a material increase in the company's total contingent resource across its landholdings, which will be updated to the market later this month, Beach said.
"The resource booking announced today is likely to be just the beginning of more to come as we continue to de-risk the area through further testing of our two existing wells and our pilot program set down for 2012," managing director Reg Nelson said in a statement.
