OilVoice - Origin to Acquire Interest in a Diverse South-east Asian Exploration Portfolio

Origin to Acquire Interest in a Diverse South-east Asian Exploration Portfolio

Friday, December 04, 2009

Origin Energy Ltd ("Origin"), Australia’s leading integrated energy company, has reached agreement with respect to a planned farm-in arrangement with Salamander Energy plc ("Salamander"), to take interests in a portfolio of five exploration blocks operated by Salamander across Northeast Thailand, Lao PDR and Vietnam.

Salamander will also have the option to acquire an interest in one exploration block currently operated by Origin in south-east Asia.

Origin’s Managing Director, Mr Grant King said "The transaction with Salamander provides Origin with an exploration portfolio targeting gas supply to the fast growing energy markets in the region, particularly markets for power generation.

"We are pleased to engage with Salamander, a company that has extensive experience operating in south-east Asia, and look forward to working with the company to develop opportunities in this region of growing energy demand," Mr King said.

Origin will fund the next US$50 million of joint venture exploration and appraisal expenditure across the five blocks, and Origin may fund up to an additional US$40 million of joint appraisal expenditure if exploration success is achieved.

An active drilling programme is planned to commence in the farm-in areas in January 2010, with wells planned in four of the five blocks, targeting gross un-risked prospective resources in excess of 400 million barrels of oil equivalent (operators estimate). Drilling will begin with the Bang Nouan-1 exploration well in Lao PDR, followed in the June quarter of 2010 with two offshore exploration wells in Vietnam. Two onshore appraisal wells on the Dao Ruang gas discovery in block L15/50, Northeast Thailand will be drilled towards the end of 2010.

Origin anticipates that the initial capital expenditure will be spread approximately equally across the 2009-10 and 2010-11 financial years.

Completion of the transaction is subject to final farm-in agreement terms, in addition to joint venture, host government and regulatory approvals.

Origin and Salamander will continue to work together to seek and exploit additional upstream opportunities as both companies look to expand their presence across the region.