Origin Energy Farms in to Seven Canning Basin Exploration Permits
Origin Energy Ltd. has entered into various agreements with ASX-listed Buru Energy Ltd. and Rey Resources Ltd. to acquire interests in seven exploration permits, namely EP 457, EP 458, EP 129, EP 391, EP 428, EP 431 and EP 436 located onshore in the Canning basin in Western Australia, in exchange for carrying approximately A$23 million of their share of work program costs.
Under the terms of the first transaction, Origin will earn a 40% working interest in EP 457 and EP 458 in exchange for free-carrying Buru Energy and Rey Resources for A$3 million of the expenditure towards the initial work program, primarily consisting of a 2D seismic acquisition survey. Upon completion, Origin will hold a 40% non-operated interest in the permits, with Buru Energy holding a 40% operated interest, and Rey Resources holding the remaining 20% interest.
EP 457 and EP 458, also known as the Fitzroy blocks, cover a combined area of approximately 5,000 sq. km located in the Canning basin, over parts of the southern flank of the Fitzroy Graben. The permits primarily target the Ungani trend, Laurel Gas province, and the Goldwyer shale formation. A trial 2D seismic reprocessing program was completed in July 2019 over the permit area, which resulted in a marked improvement in the quality of the sub-surface image.
In addition, Origin will earn a 50% working interest in EPs 129, 391, 428, 431 and 436 in exchange for funding the 100% of the initial work program on the permits and refunding all back-costs of up to A$20 million. Upon completion of the transaction, Origin will hold a 50% working interest in the permits, with Buru Energy holding the remaining 50% operated interest.
EPs 129, 391, 428, 431 and 436 cover a combined area of more than 15,000 sq km located in the Canning basin. The initial work program includes a commitment to drilling the Rafael 1 and Kurrajong 1 wells as soon as practicable in 2021. The work program further includes the acquisition of regional and prospect level seismic programs on the permits.
“Origin will now hold positions in three large prospective onshore basins – the Beetaloo, Canning, and Cooper-Eromanga – giving us exposure to conventional and unconventional gas plays and what we believe are the most prospective shale formations in Australia. Our interest in these seven permits lies in the strength of the gas resources following extensive analysis of the basin, and the longer-term potential for carbon capture and storage,” said Mark Schubert, Executive General Manager of Origin.
Sydney-based Origin is engaged in power generation, transmission and distribution, oil & gas exploration and production, natural gas supply, renewable energy, LNG and LPG operations in Australia and Papua New Guinea.
The transactions are subject to customary closing conditions, including the approval and registration of dealings and transfers by Western Australia’s Department of Mines, Industry Regulation and Safety (DMIRS).