Tipton West

Beach acquired its 40% interest in the Tipton West Joint Venture in 2005 for A$35 million.

Beach sold its 40% joint venture interest in the producing Tipton West Field and associated tenements in the Surat Basin, 20 km south of Dalby, to Arrow (a 42% joint venture party and Operator through its wholly owned subsidiary) under a tiered payment structure in April/May 2009.

The sale price consisted of a mix of cash, shares and contingent payments as highlighted below:

• A$260 million cash - payable on completion;
• A$70 million of Arrow shares as listed on the ASX - issued on completion;
• Up to A$40 million for the booking of additional gross 3P reserves;
• A$15 million in cash upon gas owned by Arrow supplying any LNG project no later than 31 December 2016; and
• A$15 million in cash upon any LNG project producing an annualised equivalent of 1 million tonnes per annum (mtpa) of LNG using gas supplied from Arrow's tenements no later than 31 December 2017.

Selling its interests in the Tipton West assets will yield Beach a profit of approximately A$276 million in this financial year (before tax).

Beach's Managing Director, Reg Nelson said:

"This deal realises significant and immediate value from a small investment in the then nascent coal seam gas industry only a few years ago. The cash genertaed from what was a material, but non-core asset, leaves Beach in a strong net cash position. Beach is now exceptionally well placed to make further investments in other business areas, some of which we have already identified. In particular, we are now well positioned to take advantage of opportunities which will continue to emerge at a time when many projects suffer from undercapitalisation".