Origin Energy to Earn an Additional 7.5% Interest in the Beetaloo JV in Australia
Integrated Australian energy company Origin Energy Ltd. has entered into an agreement with its joint venture partner Falcon Oil & Gas Ltd. to earn an additional 7.5% interest in the Beetaloo Joint Venture in the Northern Territory, thereby increasing its interest in the project to 77.5%. Under the terms of the agreement, Origin will increase the gross cost cap of the work program (Stages 2 and 3 combined) by A$150.5 million, from the previously agreed A$113.3 million to an overall cost cap of A$263.8 million, and will earn an additional 7.5% interest in exchange for carrying Falcon for an additional A$25.4 MM under the new overall cost cap. Expenditure above the overall cost cap will be borne by the JV partners in proportion to their participating interests.
The Beetaloo JV is located across exploration permits EP 98, 117 and 76 covering a combined area of over 18,500 sq. km in the Beetaloo Basin, located approximately 500 km south-east of Darwin. Primary targets include the Velkerri shale formation, with additional targets including the Kyalla shale and Hayfield sandstone oil/condensate play. The project is situated close to transport infrastructure options connecting the permits to LNG capacity in Darwin to the north and in Queensland to the east.
Origin and Falcon have also agreed to changes to the joint operating agreement, including amendments that provide Origin as operator with control over the timing, direction and budgets for future project activity, as well as flexibility in any future farm down scenario, within the permit areas. Additionally, Origin will assume 25% of the cost of Falcon’s remaining call option to reduce the overriding royalties with Territory Oil & Gas LLC and certain affiliates under the terms of a previous agreement entered into by Falcon in December 2013.