ORIGIN Energy will buy a further 7.5% interest in its Beetaloo Sub-basin project, in the Northern Territory, from joint venture partner Falcon Oil and Gas.

Under the new agreement, Origin will increase its stake to 77.5% in exchange for paying a further $25 million on development of the Kyalla project in coming years. 

It comes a day after the company announced cost cuts. 

The onshore Kyalla shale project, dubbed a ‘game changer' by analysts, was put on ice last week over concerns that workers would not be able to access restrictions imposed by the Northern Territory government over COVID-19 concerns. 

The JV drilled the Kyalla 117 N2-1H ST2 well to a total depth of 3809 metres including a 1579 lateral section in February. Further appraisal work including fraccing has now been postponed and the well has been shut in. 

Elevated gas shows with relatively high liquids were observed in all three of the target reservoirs encountered while drilling. 

"Results to date from the Kyalla 117 well demonstrate good reservoir continuity, conductive natural fractures, and continuous gas shows," Origin said in a statement today. 

As operator, Origin hopes to frac the well in the first half of next year. The JV is also planning a section well, Velkerri Flank, to spud in the second half of 2021.

Citing the unprecedented circumstances, Falcon CEO Philip O'Quigley said last week the company would act quickly to protect local communities. 

Source: Energy News Bulletin

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