Origin Energy announced its plan to exit its upstream exploration permits and will divest 100 per cent of its interest in the Beetaloo Basin.
The announcement comes as Origin Energy concentrates on its strategy and goal to be the leader in the energy transition.
In a statement, Origin Energy said a deal had been reached to sell its interest in Northern Territory’s Beetaloo Basin to Tamboran (B1) Pty Limited, a company equally owned by Tamboran Resources Limited and Bryan Sheffield, for an upfront payment of $60 million and a royalty on future production throughout the field across the Origin Energy interest being acquired. Additionally, a gas sale contract was also signed by Origin Energy for the offtake of upcoming gas production.
With the exception of its stake in Australia Pacific LNG, Origin Energy is set to conduct a strategic review of all active exploration permits with a view to eventually terminating those permits. Origin Energy stated it would keep working with its joint venture partners and meeting its obligations under current joint venture agreements as it considers its exit.
Origin Energy CEO Frank Calabria said the decision to divest Origin Energy’s stake in the Beetaloo Basin and withdraw from other upstream exploration permits would give the company more flexibility in allocating capital to its strategic priorities, which include expanding customer solutions and cleaner energy sources and providing consistent energy throughout the transition.
“We believe gas will continue to play an important role in the energy mix, and it remains a core part of our business. Notwithstanding the prospectivity of any of these permits, typically, the experience in progressing these types of projects is that the exploration and appraisal phase can be uncertain, and it can be capital-intensive to bring projects into production. Ultimately, we believe Origin is better placed prioritising capital towards other opportunities that are aligned to our refreshed strategy,” Calabria stated.
According to Calabria, the agreements signed with Tamboran (B1) enable Origin Energy to realise the value of its prior investments and exploration efforts while guaranteeing that the project can be carried out by a different operator already present and dedicated to developing the region’s resources.
He added that Origin Energy signed a gas sales agreement that will supply Origin Energy with competitively priced gas if the Beetaloo Basin is developed.
“We’ve been exploring in the Beetaloo Basin alongside our partner Falcon for eight years, and we’re grateful for the strong support we have received from the local community, including Native Title holders and contractors, as well as the Northern Territory and Federal governments,” he said,
According to Origin Energy, other facets of Origin’s Integrated Gas business, including the company’s investment in Australia Pacific LNG and role as upstream operator, or Future Fuels won’t be impacted by the divestiture of the Beetaloo Basin interests and the review of the remaining exploration permits.
