Origin will buy all the JV's production to be processed under a new agreement with Lochard Energy at the Iona gas plant as EnergyAustralia's agreement that has been in place since the Casino gas field started supply in February 2006 expires on February 28.
Cooper (50%), AWE and Mitsui E&P Australia (25% each) are the JV partners in the Casino Henry JV which produces gas from the Casino, Henry and Hetherby gas fields in VIC/L24 and VIC/L30 offshore Victoria in the Otway Basin, and the JV also holds the adjoining VIC/P44 exploration permit and VIC/RL11 and VIC/RL12 retention leases.
The asset is one of the "we'll deal with that later" issues that Mineral Resources chief Chris Ellison left unattended in his rationale to take over AWE, which the oiler agreed to this morning after the bid was revised with an additional cash component which effectively raised the bid to 83cps.
The field's total production for the financial year to date has averaged about 36 terajoules a day, with greater output expected once the workover of the Casino-5 well due in February is wrapped up.
Cooper managing director David Maxwell said the new deal was the first step in a suit of activities planned to boost production and revenue from the project from 2018-2020.
"The new sales agreement aligns Casino Henry gas prices with current market rates and provides strong encouragement for further development of the project's reserves and exploration for new reserves," he said.
"We are looking forward to an anticipated production uplift from the workover of Casino-5 in February and are advancing planning for drilling of a well in 2019 to bring undeveloped gas in the Henry field to market."
The 10-month term of the new agreement was chosen so as to align supply agreements with the calendar year contract window customary in the industry, and to preserve optionality for optimal contracting at higher gas volumes from 2019.