Origin Energy has signed an agreement to sell its Ironbark coal seam gas project in Queensland’s Surat Basin to Australia Pacific LNG (APLNG) in an A$231m ($164.7m) transaction.
The Ironbark project is estimated to have 129 petajoules (PJ) of 2P reserves and 192PJ of 3P reserves.
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Last August, Origin entered Stage 1 front-end engineering design for Ironbark and announced that it was assessing alternate strategic options for the project.
Origin owns a 37.5% stake in AP LNG in a joint venture with ConocoPhillips (37.5%) and Sinopec (25%).
The company will continue to manage the development of Ironbark because of its role as the upstream operator for APLNG.
Origin Energy CEO Frank Calabria said: “The sale represents the best way for Origin to maximise value from Ironbark.
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By GlobalData“Australia Pacific LNG is able to realise additional value from the asset by utilising its existing nearby gas and water processing infrastructure to efficiently bring the gas to market. Origin will derive value from the development of the Ironbark asset through its investment in Australia Pacific LNG.”
As a result of the transaction, Origin expects to book a non-cash post-tax impairment of A$34m ($24.24m) in the 2019 half-year results.
The completion of the sale is conditional upon the receipt of the Australian Competition and Consumer Commission (ACCC) and foreign investment approvals.
According to a report in the Sydney Morning Herald, Origin acquired the asset for A$655m in 2009.
Last February, Origin disclosed that it would book an after-tax impairment of A$360m ($256.72m) for the Ironbark field due to a downgrade in Ironbark reserves and a revised development plan.
