Origin Energy to acquire Karoon’s Poseidon permits

Origin Energy Ltd., Sydney, has agreed to acquire 40% equity in the offshore Western Australian Browse basin permits WA-315-P and WA-398-P that contain the Poseidon gas fields from Karoon Gas Australia Ltd., Melbourne, for up to $800 million.

The structured payment details within the conditional sale and purchase agreement include an up-front payment to Karoon of $600 million upon completion of the deal. There will also be a deferred cash payment of $75 million payable to Karoon on a final investment decision (FID) for development of the Poseidon fields plus a second deferred payment of $75 million payable on first production.

In addition Origin will pay $5 million for every 100 bcfe of independently certified 2P reserves exceeding 3.25 tcfe across the permits at the time of FID to a maximum of $50 million.

Origin will also be responsible for all proportional costs associated with the Pharos-1 exploration well currently being drilled in WA-398-P along with proportional costs associated with the ongoing Poseidon fields appraisal program.

The agreement is subject to joint venture pre-emptive rights and regulatory approval. ConocoPhillips holds 40% of both permits and is operator. PetroChina holds the remaining 20% in each permit.

Nevertheless, Karoon expects completion of the deal during the third quarter of this year.

Development of Poseidon may involve transportation of natural gas to an LNG plant in Darwin or to an FLNG facility at the field.

Karoon has retained its 90% interest in permit WA-314-P, which lies immediately to the north of WA-315-P.

The deal comes two weeks after Karoon’s announcement of a $63 million farm-in to the company’s offshore Carnarvon basin permits in WA to Apache Energy.

For Origin the Poseidon purchase extends its already considerable gas interests in Australia. The company has extensive stakes in the onshore Cooper basin of South Australia and Queensland, has recently farmed into permits in the Beetaloo basin in the Northern Territory, and is operator of the Australia Pacific CSG-LNG project feeding Surat-Bowen basin coal seam gas into an LNG plant being built on Curtis Island near Gladstone in Queensland.

Related Articles

ConocoPhillips, Suncor join Shell in deepwater exploration off Nova Scotia

06/11/2014

ConocoPhillips and Suncor Energy Inc. are joining Shell Canada as partners in exploring the deepwater Shelburne basin off Nova Scotia.

Osum to purchase Orion project from Shell for $325 million (Can.)

06/11/2014

Osum Oil Sands Corp., Calgary, plans to purchase the Orion oil sands project in Alberta from Shell Canada for $325 million (Can.).

MARKET WATCH: NYMEX crude oil stays above $104/bbl; OPEC quota unchanged

06/11/2014 The crude oil contract price for July delivery fell modestly June 10 yet still hovered above $104/bbl on the New York market as participants awaite...

EIA: US oil production in 2015 expected to be highest since 1972

06/10/2014 Total US crude oil production in 2015 will reach its highest level since 1972, the US Energy Information Administration forecast in its Short-Term ...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected