OilVoice - Origin Completes Otway Gas Project Acquisition

Origin Completes Otway Gas Project Acquisition

Tuesday, March 16, 2010

Origin Energy Limited, Australia's leading integrated energy company, has increased its interest in the Otway Gas Project to 67% following completion of the acquisition of an additional 36% interest from Woodside Energy Ltd ('Woodside'). The acquisition was undertaken through its subsidiary Origin Energy Resources Limited.

The acquisition was initially announced in November 2009 with an effective date of 1 July 2009. The purchase price has been adjusted for the estimated net impact of capital expenditure, operating costs and earnings to completion, taking the price to $520 million. This is subject to a further adjustment on the settlement of final joint venture accounts up to the completion date.

Commenting on the acquisition Origin's Managing Director, Grant King said, 'We are pleased to increase our interest in this project as the asset and surrounding exploration acreage is well known to us and complements our retail, generation and upstream interests across the region.

'The acquisition includes production licenses which contain the Thylacine and Geographe fields and associated offshore production facilities, pipelines and onshore gas processing plant, together with adjacent exploration permits.

'The increased interest provides additional earnings from sales of natural gas, LPG and condensate extracted from the liquids-rich gas stream, as well as providing greater access to the growth potential and exploration upside of the area.

'This complements our existing operations in the Bass Basin province to the east where we have recently had success with appraisal of the liquids-rich Trefoil field and discovery of gas and oil in the Rockhopper field,' Mr King said.

Benaris International Pty Ltd ('Benaris') also acquired a portion of Woodside's interests in the area after exercising pre-emption rights.

Origin and Woodside are aiming for a handover of operatorship during the June Quarter 2010 subject to certain regulatory approvals. Woodside will continue as operator in this interim period, during which time Origin and Woodside will work cooperatively to complete a safe, smooth and efficient handover.

The acquisition has been funded from existing balance sheet capacity and is expected to be earnings accretive from the 2010/11 financial year.