Origin announces agreement to sell New Zealand TAWN assets
Origin Energy Limited (Origin) announces it has entered into an agreement to sell its Tariki, Ahuroa, Waihapa and Ngaere (TAWN) fields in New Zealand's Taranaki region, along with the Waihapa Production Station and associated infrastructure assets, to New Zealand Energy Corp. (NZEC).
The sale consideration is approximately CDN$42 million (with adjustments) and a five per cent gross overriding royalty payable to Origin on future production from the TAWN fields.
As part of the agreement, Origin will maintain an option for a period of 10 years to use eight wells within the TAWN fields for gas storage. Further, NZEC will fund a development well in the Waihapa licence and Origin will retain 50 per cent production rights from that well.
The sale, which does not include Contact Energy's Ahuroa gas storage permit, is subject to various conditions precedent including New Zealand government approvals, Origin's completion of Waihapa Production Stations recommissioning and execution of further agreements with Contact Energy regarding use of the Ahuroa gas storage area.
In welcoming the sale agreement, Origin Energy New Zealand General Manager Chris Bush said, "The divestment of Origin's TAWN assets to NZEC will allow for the next phase of the production fields' ongoing development.
"The divestment of the TAWN assets will also allow Origin to focus on its principal New Zealand activities including its interest in the Kupe Gas Project, the development of the Manutahi oil field and Canterbury Basin exploration activities," Mr Bush said.
The sale is expected to complete in October 2012. Origin will continue as operator of Waihapa Production Station during a transition period expected to conclude in mid-2013.
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