Origin, Falcon Improve Oz Beetaloo Terms

Australia’s Origin Energy and smaller Toronto-listed Falcon Oil & Gas have agreed jointly to acquire a 1% overriding royalty interest (ORRI) over their Beetaloo shale permits.

It relates to exploration permits EP76, EP98, and EP117 in Australia’s Northern Territory (NT).

Under a 2014 call option agreement, Falcon and Origin had a five-year option to terminate the ORRI for US$5mn, to be paid in proportion to their respective interests in the exploration permits, to the ORRI’s Swiss owner CR Innovations. The latter was declared bankrupt March 21 2017. Falcon and Origin have now signed a termination agreement with CR’s liquidator and paid Swiss francs 150,000 ($151,000) to the liquidator who has terminated the 1% ORRI, said Falcon October 3. 

An ORRI does not come from owning a share of the reserves but from the ownership of a portion of generated revenue and is carved out of the operator's working interest.

In April 2018, Origin CEO Frank Calabria mentioned a move by the NT to lift its exploration and fracking moratorium and said the company would be moving in soon: “We look forward to recommencing our exploration and appraisal activity in the Beetaloo Basin in 2019.” Last month the NT government launched a plan to resume onshore upstream activity; it followed the lifting of the moratorium.

Falcon has also been seeking shale gas exploration rights in South Africa's Karoo basin for several years.