Origin To Increase Its Stake In The Otway Gas Project

abarrelfullabarrelfull wrote on 12 Mar 2015 13:54

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2 November 2009

Origin Energy Limited (“Origin”), Australia’s leading integrated energy company, has entered into an agreement to acquire Woodside Energy Ltd’s (“Woodside”) 51.55% interest in the Otway Gas Project for $712.5 million.

Origin’s Managing Director, Mr Grant King said, “The transaction includes production licenses which contain the Thylacine and Geographe fields and adjacent exploration permits, together with associated offshore production facilities, pipelines and onshore gas processing plant.

“As an existing joint venture party with a 30.75% interest in the Otway Gas Project, we have undertaken the purchase with detailed knowledge of the asset, reserves, infrastructure and potential of the surrounding acreage.

“The Otway Gas Project is a premier asset with established production. Increasing our interest in the project provides additional earnings from natural gas sold under existing long term contracts to TRUenergy as well as from LPG and condensate sold from the liquids-rich gas stream.

“Importantly, it also provides greater access to the growth potential and exploration upside of the area.

“It is expected that the transaction will be earnings accretive from the first full financial year following completion. The acquisition will be funded from existing corporate capacity, which at 30 September 2009 included $4.4 billion of cash reserves and undrawn bank facilities,” Mr King said.

The transaction, which is effective from 1 July 2009, will be completed after certain conditions precedent have been satisfied including assignment of third party contracts. It is expected that completion will occur by the end of 2009. Origin will book earnings from the time of completion, and the purchase price will be adjusted for the net impact of costs and earnings between the effective date and completion.

Woodside will continue as operator until the transfer to Origin, which will be subject to certain regulatory and joint venture approvals.

Origin and Woodside are aiming for a handover of operatorship by the second quarter calendar 2010. In this interim period Origin and Woodside will work cooperatively to effect a safe, smooth and efficient handover.

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