SYDNEY, Australia – Origin Energy Ltd. has entered a conditional agreement with Karoon Gas to acquire Karoon’s 40% interest in two exploration permits (WA-315-P and WA-398-P) in Western Australia’s Browse basin (Poseidon permits). These permits contain large and prospective offshore gas fields, including the Poseidon discovery.
ConocoPhillips, as operator, and PetroChina hold 40% and 20% interests in the permits, respectively, and also retain preemption rights for a limited period relating to the sale of Karoon’s interest in Poseidon.
If approved, Origin will pay $600 million cash consideration 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.
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 position. Options to monetize Poseidon may include transporting natural gas to LNG production facilities in Darwin or through a stand-alone floating LNG facility.