Origin Energy has acquired two massive natural gas exploration permits for the Browse Basin, including offshore gas fields, for US$600 million.
It has today announced an agreement with Karoon Gas to acquire its 40 per cent take in exploration permits WA-315-P and WA-398-P, or the Poseidon permits, off Western Australia.
Speaking on the acquisition, Origin managing director Grant King said its "acquisition of a 40 per cent stake in the Greater Poseidon Area will allow the company to establish a strategic position in one of Australia's largest recent offshore gas discoveries at a competitive entry price when compared to transactions in the Browse/Bonaparte region".
"Poseidon is located in one of Australia's most significant hydrocarbon regions and various options exist to monetise the gas through LNG export opportunities linked to growing demand in the Asian region."
The remaining 60 per cent of the permits are held by ConocoPhillips, the project's operator (at 60 per cent) and PetroChina, at 20 per cent.
Origin will pay approximately US$600 million cash for the stake in Poseidon, with additional payments of US$75 million upon a Project Final Investment Decision (FID) and US$75 million on first production.
Another US$50 million will be payable up first production if 2P reserves at the time of FID reach pre-set thresholds.
King went on to say that the acquisitions of these permits complements recent farm-ins in South Australia's Cooper Basin and the Northern Territory's Beetaloo Basin, increasing Origin's exposure to growing demand for natural gas both in Australia and overseas.
"We believe that acquiring these resources, when compared with greenfield exploration, substantially reduces the risk of securing opportunities to drive the long-term growth of Origin," King said.