Origin Energy Limited (Origin), together with Sasol Limited (Sasol), announced Friday the signing of a conditional agreement with Falcon Oil & Gas Australia Limited (Falcon) for three onshore exploration permits in the Northern Territory’s Beetaloo Basin in Australia.
Upon completion of the farm-in agreement, Origin and Sasol will each hold 35 percent interest in the three permits and Falcon will hold a 30 percent interest. Located about 310 miles (500 kilometers) south-east of Darwin, the permits cover an area of more than 7,142 square miles (18,500 square kilometers) within the Beetaloo Basin, which is highly prospective for shale gas and associated liquids.
Upon completion of the farm-in agreement, Origin will pay Falcon approximately $10.2 million (AUD 11 million). Origin will then assume operatorship of the permits and progressively contribute $29.69 million (AUD 32 million) during three years to fund its share of exploration (Stage 1).
Origin and Sasol each hold an option to participate in two additional work programs, Stage 2 and Stage 3, which, if they proceed, are forecast for calendar years 2017 and 2018. Origin’s contributions to Stage 2 and Stage 3 are currently estimated to be $23.19 million (AUD 25 million) and $22.26 million (AUD 24 million) respectively.
Origin’s CEO Upstream, Paul Zealand said, “This farm-in provides Origin a significant unconventional exploration position in one of the Northern Territory’s most prospective onshore basins. Previous exploration activities within the Beetaloo Basin, including drilling activity on the permits, has highlighted its strong shale gas potential.
“The signing of this farm-in agreement is consistent with our objective to find new sources of energy. Upon success, these resources could then be monetized by connecting them with domestic and international markets,” Zealand said.
The agreement is subject to certain conditions precedent including regulatory and other relevant consents and approvals. Origin will acquire and fund Sasol’s farm-in interest if the latter does not obtain a required regulatory approval.
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