Origin, Karoon skip Poseidon permits pre-emption hurdle

PetroChina and ConocoPhillips have not exercised their pre-emption rights in relation to Karoon’s sale of its 40 per cent interest in the Poseidon exploration permits to Origin, Karoon has reported.

This clears the way for Origin’s purchase of the WA-315-P and WA-398-P in Western Australia’s Browse Basin (Poseidon permits) from Karoon. The permits contain large and prospective offshore gas fields, such as the Poseidon discovery.

The current joint venture partners (ConocoPhillips, PetroChina and Karoon), and Origin will now complete transfer documentation, which is subject to regulatory approval.

The sale is expected to complete during the third Quarter 2014.

Under the terms of the Sale and Purchase Agreement (“SPA”) with Origin, Origin will pay US$600 million cash consideration with additional payments of US$75 million payable upon a project Final Investment Decision (FID) and US$75 million payable on first production. A further payment of up to US$50 million will be payable on first production if 2P reserves at the time of FID reach certain thresholds.

Origin will pay US$5 million for every 100 BCFe of Independently Certified 2P reserves exceeding 3.25 Tcfe across the permits at the time of FID up to a maximum of US$50 million. In addition, Origin will be responsible for all costs associated with the current Pharos-1 exploration well, located in permit WA-398-P.

ConocoPhillips and PetroChina, who hold 40 per cent and 20 per cent interests in the permits respectively, held pre-emption rights for a limited period expiring 30 June 2014.

Subject to the satisfaction of other conditions precedent and appropriate regulatory approvals, Origin’s acquisition of Karoon’s interest in the permits is expected to be completed in one to two months.

 

Offshore Energy Today Staff, July 01, 2014

 

 

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