Origin Buys Karoon's 40% Stake in Two Gas Permits in Western Australia

Origin Energy on Monday announced it has agreed to acquire Karoon Gas’ entire 40 per cent stake in two natural gas exploration permits (WA-315-P and WA-398-P) in Western Australia’s Browse Basin (Poseidon permits).

Origin will pay $600 million cash with additional payments of $75 million payable upon a project Final Investment Decision (FID) and $75 million payable on first production.

A further payment of up to $50 million will be payable on first production if 2P reserves at the time of FID reach certain thresholds.

The two permits contain large and prospective offshore gas fields, such as the Poseidon discovery.

“Origin’s acquisition of a 40 per cent 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. 

ConocoPhillips, the project operator, and PetroChina hold 40 per cent and 20 per cent interests in the permits respectively and also retain pre-emption rights for a limited period relating to the sale of Karoon’s 40 per cent interest in the Poseidon permits.

Origin will participate in the ongoing exploration and appraisal program - including the Pharos well which is currently being drilled by the joint venture - on a proportional basis to augment Poseidon’s existing resource position. Options to monetise the Poseidon field’s resources may include transporting natural gas to LNG production facilities in Darwin or through a standalone floating LNG facility.