Origin to exit Australia's Beetaloo basin
Origin Energy will divest its interest in the Northern Territory’s Beetaloo basin, and exit its upstream exploration permits not related to Australia Pacific LNG (APLNG), the company said on September 19.
The company has signed agreements with Tamboran (B1), an entity 50:50 owned by Sydney-listed Tamboran Resources and its substantial shareholder, Bryan Sheffield, to divest its interest in the Beetaloo basin for an upfront consideration of A$60mn ($40.4mn) and a royalty on future production over the life of field across the interest being acquired. Origin has also executed a gas sale agreement for offtake of future gas production.
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Origin said it will undertake a strategic review of all remaining exploration permits, excluding its interests in APLNG, with a view to exiting those permits over time. APLNG, a joint venture comprising Origin, ConocoPhillips and China's Sinopec, is Australia’s largest producer of coalbed methane and supplies gas to Queensland’s domestic gas market, while also processing CBM into LNG for exports.
“The decision to divest our interest in the Beetaloo and exit other upstream exploration permits over time, will enable greater flexibility to allocate capital towards our strategic priorities to grow cleaner energy and customer solutions, and deliver reliable energy through the transition,” Origin CEO Frank Calabria said. “We believe gas will continue to play an important role in the energy mix and it remains a core part of our business."
Under the terms of the agreement with Tamboran, Origin will fully divest the entity which holds its 77.5% interest in the Beetaloo basin joint venture. Tamboran will assume operatorship of the Beetaloo joint venture, which is 22.5% owned by Falcon Oil & Gas.
Origin said it will also receive a 5.5% royalty based on wellhead revenues produced from the three Beetaloo permits which are held by the entity being acquired by Tamboran. It expects to record a non-cash post-tax loss of A$70 - $90mn in relation to the transaction.
In addition, Origin has executed a gas sales agreement for up to 36.5 petajoules/year over 10 years, conditional on Tamboran taking a final investment decision on developing the project and associated infrastructure and obtaining regulatory approvals.