Origin Energy says it has been unable from buying the full 51.55% stake in the Otway Gas Project from Woodside, after a third member of the joint venture partner decided to exercise some of its pre-emption rights in the project.
Origin was unable to take the full stake from Woodside for $712.5 million, and instead plans to take a smaller stake for $507.2 million, according to a statement from Origin yesterday.
The original 51.55% stake Origin wanted to buy from Woodside was reduced because another joint venture partner, Benaris International, decided to exercise its pre-emption right in relation to some of its interests in the project.
Another joint venture partner, CalEnergy (Gas) Australia, decided not to exercise its pre-emption rights.
Origin had held a 30.75% stake in the project, located offshore from Port Campbell in Victoria prior to the deal being agreed to.
The Otway Gas Project covers the Geographe and Thylacine gas fields, which were discovered in the offshore Otway Basin 55 – 70 kilometres respectively south of Port Campbell Victoria in mid-2001.
The Otway Gas Project is expected to ultimately produce 885 petajoules of natural gas, 12.2 million barrels of condensate and 1.7 million tonnes of liquid petroleum gas (LPG).
After the Woodside stake has been sold, Origin will become project manager.
It will hold a 67.23% stake in the development of the joint venture, and stakes in exploration of some targets of between 67.23% and 82.30%.
Origin said the sale of Woodside’s stake in the project still is subject to satisfaction of a number of conditions precedent, including assignment of third party contracts.
But it is "expected that completion will occur by the end of 2009’’ the statement said.
Shares in Origin were trading up 3 cents at $15.73.
