Origin Energy announces the sale of its interest in a shale gas basin in Australia. This one is at an early stage of development. However, its potential is very important. Thus, the company intends to focus on renewable energies.
Origin Energy sells its stake in Beetaloo
The Beetaloo Basin in Australia is a shale sub-basin located in the Northern Territory. This one is considered very promising. It could compete with the Marcellus Basin, the largest deposit in the United States. Nevertheless, its exploitation requires billions of dollars.
As a result, Origin Energy is selling its 77.5% interest in the Beetaloo Basin joint venture to Tamboran Resources and its major shareholder. The transaction is worth 60 million Australian dollars. In addition, the company will benefit from the development of the basin. The transaction includes, among other things, a 5.5% royalty on its production.
Frank Calabria, Managing Director of Origin, states:
“We felt that given the fact that these projects have a long life, are in the exploration phase and will require more capital over time, this was a good solution to allow us to realize the benefits without that capital intensity over time.”
A gas abandonment?
Origin has announced that it will increasingly turn to renewable energy. However, the company does not intend to abandon gas. Its general manager comments:
“This doesn’t change our view on gas. Gas is still going to play a critical role.”
Origin intends to relinquish some of its exploration licenses, particularly in the Canning Basin and Cooper-Eromanga Basin. However, it remains committed to its participation in Australia Pacific LNG. This is very lucrative for Australia’s second largest energy producer.
In addition, the company is experiencing difficulties. It expects a non-cash after-tax loss of A$70-90 million after the sale. Also, its shares fell 0.3%.
