Origin Energy announced the signing of two farm-in agreements with Senex Energy to acquire exploration interests in two unconventional gas blocks covering more than 1,900 km2 of South Australia’s prospective Cooper-Eromanga Basin.
The two gas blocks (Area A and Area B1) comprise a number of prospective sub-basins within the Cooper-Eromanga Basin – including the Allunga, Nappamerri and Patchawarra troughs – and provide exposure to multiple unconventional play types including tight sands, shale and deep coal seams.
Following completion of the farm-in agreements, which is expected by around 30 June 2014, Origin will progressively invest $97 million to contribute to an exploration program on each gas block (Stage 1). Upon their completion, Origin will hold a 40 per cent participating interest in Area A and a 30 per cent participating interest in Area B.
Origin will then have the option to increase its working interest in both blocks by 10 per cent via an additional $72 million investment to contribute to a pilot appraisal program in each area (Stage 2). In the event Origin elects not to exercise this option, the company would continue to hold its existing participating interests.
Senex will retain operatorship of Area A and Area B with Origin defining the technical inputs to the work programs. After completion of the pilot appraisal programs Origin would have the option to become operator in each area.
Origin Chief Executive Officer Upstream, Paul Zealand said, “The two farm-in agreements represent an attractive opportunity through which Origin can greatly increase its upside exposure to unconventional gas opportunities in one of the most attractive gas regions in eastern Australia.
“Through Origin’s longstanding investment in the Cooper Basin Joint Venture, we have gained a detailed understanding of gas exploration and development potential in the Cooper-Eromanga region. The new farm-ins provide an exciting opportunity through which we can leverage these skills and expertise.
“We are pleased to be working with Senex Energy given its proven track record operating in one of Australia’s largest onshore hydrocarbon provinces,” Zealand said.
Press Release, February 24, 2014; Image: Senex