Origin to buy Woodside’s Otway stake
Origin Energy Limited (ORG) said it has entered an agreement to acquire Woodside Energy Limited’s (WPL) 51.55% interest in the Otway Gas Project for $712.5 million. Origin said the transaction includes production licenses, which contain the Thylacine and Geographe fields, and all of Woodside’s Otway Basin offshore and onshore facilities and permits.
Managing director, Grant King, said as an existing joint venture party with a 30.75% interest in the Otway Gas Project, the company have undertaken the purchase with detailed knowledge of the asset, reserves, infrastructure and potential of the surrounding acreage.
“The Otway Gas Project is a premier asset with established production,” Mr King said.
“Increasing our interest in the project provides additional earnings from natural gas sold under existing long term contracts to TRUenergy as well as from LPG and condensate sold from the liquids-rich gas stream.”
Origin said the acquisition, which is expected to be earnings accretive from the first full financial year following completion, would be funded from existing corporate capacity.
“The transaction, which is effective from 1 July 2009, will be completed after certain conditions precedent have been satisfied including assignment of third party contracts,” the company said.
“It is expected that completion will occur by the end of 2009.”
The two companies are targeting for a handover of operatorship by the second quarter calendar 2010.
The transfer remains subject to certain regulatory and joint venture approvals.
As at 1010 AEDT, Origin shares were down 33c to $15.74, while Woodside shares were down 73c to $46.97.
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