Origin Energy has offloaded its stake in the Northern Territory’s gas-rich Beetaloo Basin for a loss of up to $90 million.

Origin announced on Monday it will sell out of the project to focus on its “strategy and ambition to lead the energy transition”, and would book a post-tax loss of $70 million to $90 million on the transaction.

“We believe gas will continue to play an important role in the energy mix and it remains a core part of our business,” Origin chief executive Frank Calabria said.

The sale would allow Origin to allocate funds towards its main goals of increasing cleaner energy and delivering reliable energy during the transition to greener sources, he said.

Divestment of the Beetaloo interests and a review of remaining exploration permits would have no impact on Origin’s Australia-Pacific gas business or its future fuels strategy, which involved potential hydrogen and carbon offset projects, the company said.

Origin said agreements had been executed with Tamboran B1, an entity jointly owned by Tamboran Resources and major shareholder Bryan Sheffield, to divest its interest in the Beetaloo Basin for an up-front payment of $60 million and a royalty on future production over the life of the field.

Origin has also inked a 10-year gas sales agreement for up to 36.5 petajoules annually, conditional on Tamboran taking a final investment decision and getting regulatory approvals to go ahead.

The Beetaloo is one of a number of gas fields the former coalition government planned to develop to help boost the economy and secure Australia’s energy supply.

However, concerns have been raised over the project, with many fearing hydraulic fracturing in the basin could jeopardise Australia’s efforts to meet its emissions reduction targets and contaminate groundwater in aquifers.

About 90 per cent of the NT’s water supply comes from groundwater.

Origin said it would undertake a strategic review of all remaining exploration permits, excluding its interests in Australia-Pacific gas, with a view to exiting those permits over time.

“We’ve been exploring in the Beetaloo Basin alongside our partner Falcon for eight years, and we’re grateful for the strong support we have received from the local community, including native title holders and contractors, as well as the Northern Territory and federal governments,” Mr Calabria said.

Completion of the transaction is subject to NT ministerial consent.

– AAP

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