Origin signs deal to buy permit

MELBOURNE - Oil and gas producer Origin has signed an A$660 million ($836.3 million) conditional deal to buy a coal seam gas exploration permit in Queensland.

The permit in the Undulla Nose coal seam gas (CSG) province would be purchased from the Pangaea group and be funded from existing cash reserves. Origin expects to book proved, probable and possible reserves of CSG of around 1150 petajoules (PJ) in respect of the area at June 30 with further contingent resources of about 500PJ.

"The transaction is evidence of the continuing consolidation of the CSG industry, principally in Queensland," Origin managing director Grant King said. "The acquisition of this permit is particularly attractive.

"[The area] is near gas transmission infrastructure that services existing gas markets and is close to Origin's Darling Downs Power Station development and the Braemar 1 and 2 peaking power stations."

Origin said the acquisition of interests in the permit would be completed after certain conditions were satisfied.

- AAP