Origin Energy Limited, Australia’s largest electricity retailer and generator, has announced that it has reached a A$865.57 million agreement with Karoon Gas to acquire its entre 40% interest for in two exploration permits (WA-315-P and WA-398-P) in Western Australia’s Browse Basin (Poseidon permits), which contain large and prospective offshore gas fields.
According to the media release by Origin, ConocoPhillips, the project operator, and PetroChina hold 40% and 20% interests in the permits respectively and also retain pre-emption rights for a limited period relating to the sale of Karoon’s 40% interest in the Poseidon permits.
“Origin’s acquisition of a 40% interest in the Greater Poseidon area will allow the company to establish a strategic position in one of Australia’s largest recent offshore gas discoveries at a competitive entry price when compared to recent transactions in the Browse/Bonaparte region,” Origin Managing Director, Grant King said.
“Poseidon is located in one of Australia’s most significant hydrocarbon regions and various options exist to monetise the gas through LNG export opportunities linked to growing demand in the Asian region. We welcome the opportunity to enter the joint venture alongside two significant global oil and gas companies, ConocoPhillips and PetroChina, with whom we share a common focus to maximise the value of Australia’s significant gas resources.”
According to him, the acquisition of these permits complemented recent farm-ins in South Australia’s Cooper Basin and the Northern Territory’s Beetaloo Basin, thereby increasing Origin’s exposure to growing demand for natural gas both in Australia and overseas.
“We are mindful that the Australia Pacific LNG project begins production in mid-2015 and over the next two years there will be a significant increase in Origin’s long-term cash flow and earnings. It is important that we act now to invest in Origin’s continued development and growth through the latter part of this decade. We believe that acquiring these resources, when compared with greenfield exploration, substantially reduces the risk of securing opportunities to drive the long-term growth of Origin.”