Beach Energy signs PSA for Tanzanian exploration block

Rick Wilkinson
OGJ Correspondent

MELBOURNE, June 24 -- Beach Energy Ltd., Adelaide, has signed a production-sharing agreement with the Tanzanian government for a 100% interest in the Lake Tanganyika South concession in the western part of the country.

The block, which includes a small onshore component, but is mostly in offshore lake waters, is the only exploration lease currently active in the African Great Rift region in Tanzania and is considered prospective for oil given the recent discoveries made on trend further to the north in Uganda by Tullow Oil PLC and Heritage Oil PLC.

The specific terms of the PSA are being kept confidential, but because of the remote area of operation, they are considered more favorable than the standard Tanzanian terms.

The PSA comprises three phases: two 4-year terms and one 3-year term. Beach will conduct geophysical and geological studies during the first phase to determine the range of drilling opportunities that might be available. These data will be used to design seismic surveys leading to the drilling phase.

Beach has a well commitment in each of Phases 2 and 3, with an option at the end of each phase to relinquish all of the remaining acreage without further obligation.

The company plans to fly aerial gradiometric gravity and magnetic surveys before yearend.