By Sarah Byrne
ORIGIN Energy is focused on developing its Northern Australian opportunities, Poseidon and Beetaloo, with its existing infrastructure and a progressive government serving as an advantage to working in the region.
Speaking to Oil & Gas Australia on the sidelines of SEAAOC, Origin general manager of exploration and development Martin Riley said Northern Australia was one of many opportunities the company was considering with the Beetaloo basin and Poseidon field strong options.
“We’ve had a look at a lot of shale options, as an example, we believe the Beetaloo basin in the Northern Territory, if there is going to be a shale development in Australia, I think that is in our view one of the better opportunities.”
Mr Riley said Origin has put a major stake in Beetaloo and sees it as one of the future growth options.
Origin, the operator of the Beetaloo joint venture confirmed in July the Kalala S 1 well in EP98, located in the Northern Territory had been spudded.
Kalala S 1 is the first of three onshore wells drilled by the joint venture, and is targeting the Middle Velkerri formation to assess hydrocarbon saturation and reservoir quality.
Origin said it expects the well to be drilled to a total depth of about 2,800 metres.
Beetaloo is located 500 kilometres south east of Darwin and is a joint venture between Origin (35 per cent), Sasol Petroleum Australia (35%) and Falcon Oil and Gas (30%).
Equally Origin has invested “quite a bit of money” offshore in Poseidon, Mr Riley said.
“We felt the Poseidon field was the most well defined and the best opportunity especially in terms of expanding into Darwin and was the next best development option for the Northern part of Australia.”
Located within the offshore Browse basin, the Greater Poseidon field is about 480 kilometres north of Western Australia.
ConocoPhillips operates two exploration permits, WA 315 P and WA 398 P, with a 40% interest alongside co-venturers Origin (40%) and PetroChina (20%).
The second phase of exploration drilling concluded in August 2014, with a technical review of the drilling results continuing this year, along with feasibility engineering of the two development options – floating LNG and backfill of the existing Darwin LNG facility.
From a liquefied natural gas (LNG) perspective, Mr Riley said Northern Australia’s close proximity to South East Asian markets make it a good place to invest.
The Northern Territory’s progressive government and having an existing LNG hub were also key factors noted by Mr Riley as reasons to consider development opportunities in the region.
“In terms of moving into an area that’s already got an existing industry, and I think generally a fairly under explored resource and an under developed resource, those two things are pretty important to us,” he said.
Reducing costs and driving government regulation that enables the industry are key factors in ensuring Australia’s oil and gas sector is competitive, and investment and development of projects continue, according to Mr Riley.
“Australia has been in the past very cost effective if you wind the clock back 10 to 20 years, we were very cost competitive on a global basis and I think we can return to those days, but we have to attack all aspects of the cost base,” he said.
Origin reported a statutory loss of $658 million for the full year ended 30 June 2015, with an underlying profit of $682 million, which was a 4% decrease compared to the previous year.
Group operating cash flow after tax was $1.58 billion, a 23% decrease on the previous corresponding period. Origin chairman Gorgon Cairns said the 2015 and 2016 financial years were transitional years for the company, as it completes the final stages of its investment in Australia Pacific LNG.
Mr Cairns said the company is continuing to focus on reducing operating and capital costs, realigning debt across the group entities and where appropriate divesting assets in order to increase the company’s financial flexibility in the short to medium term.
“Origin has $5.8 billion of committed and undrawn debt facilities and cash, which is more than sufficient to fund the company’s remaining contributions to Australia Pacific LNG and other business initiatives,” he said.
An unfranked final dividend of 25 cents per share paid was agreed by the board at the end of the financial year.