Origin Energy has agreed to divest its 100% interest in oil and gas assets in the Beetaloo Basin located in the Northern territory, Australia to Tamboran (B1).
The transaction has upfront consideration of A$60m ($40.31m) and a royalty on future production over the life of the potentially high-producing shale gas basin.
Tamboran (B1) is 50-50 owned by Tamboran Resources and its substantial shareholder Bryan Sheffield.
Currently, Origin holds a 77.5% operatorship stake in a joint venture with Falcon Oil and Gas Australia (22.5%) for exploring for shale gas across three permit areas (EP 76, 98 and 117) in the Beetaloo Basin.
The sale forms part of the firm’s efforts to exit its upstream exploration permits to shift its focus on renewable energy.
Under the deal terms, Origin will offload its 77.5% stake in the Beetaloo Basin joint venture to Tamboran.
Origin will also receive a 5.5% royalty based on wellhead revenues produced from the three permits from Tamboran (B1).
Furthermore, Origin signed agreement to purchase 36.5 petajoules of gas a year for a period of ten years from the Beetaloo Basin asset.
Origin CEO Frank Calabria said: “The decision to divest our interest in the Beetaloo and exit other upstream exploration permits over time, will enable greater flexibility to allocate capital towards our strategic priorities to grow cleaner energy and customer solutions, and deliver reliable energy through the transition.
“We believe gas will continue to play an important role in the energy mix and it remains a core part of our business.”
Origin plans to carry out strategic review of all remaining exploration permits. This excludes the firm’s stakes in Australia Pacific LNG.
Calabria added: “Gas will continue to have an important role in our business, particularly through our interest in Australia Pacific LNG and role as upstream operator in that venture, and in the broader energy mix as we look to underpin reliable energy supply to customers and accelerate our investment into the energy transition.”
However, Falcon holds a pre-emptive right to acquire a 77.5% stake in the Beetaloo Basin JV, from Origin.