The transaction is conditioned upon approval from Australia's Foreign Investment Review Board and, if required as a result of an outstanding offer from BG to purchase all outstanding shares of Origin Energy stock, the approval of Origin Energy's shareholders. Under the plan, ConocoPhillips would initially contribute US$5 billion to the joint venture and would carry Origin Energy for their first AU$1.15 billion in joint venture expenses. ConocoPhillips would make up to four additional payments of US$500 million to the joint venture based on project milestones, for a total possible cash acquisition investment of approximately US$8 billion at current exchange rates. As a result of these investments, ConocoPhillips would receive 50 percent equity in Origin Energy CSG Limited, which holds Origin Energy's Queensland, Australia, coal bed methane assets.

The 50/50 joint venture would be comprised of coal bed methane development, operated by Origin Energy, and a liquefied natural gas project, operated by ConocoPhillips. As planned, the joint venture would market the LNG, primarily targeted to Asian markets, with ConocoPhillips leading the marketing venture for the first 10 years. The joint venture would be managed by a board of directors composed evenly of ConocoPhillips and Origin Energy representatives. The project director would be supplied by ConocoPhillips.

"With this investment, ConocoPhillips has gained access to the leading coal bed methane resource in Australia, comprising 8.1 million net acres. Moreover, the company has enhanced its LNG position with the creation of an additional Australian LNG hub serving Asia-Pacific markets. The joint venture leverages ConocoPhillips' strengths and experience in project management, coal bed methane, and LNG technology, operations and marketing," said Jim Mulva, ConocoPhillips' Chairman and Chief Executive Officer. "This joint venture better balances ConocoPhillips' oil and gas resource mix. In addition, the company's long-term production growth is expected to benefit from a steady, secure source of resource additions. We look forward to working closely with Origin in delivering this valuable energy resource to customers."

Origin's Managing Director, Grant King, said, "ConocoPhillips' investment gives confidence in the delivery of a coal bed methane-to-LNG project. The joint venture combines Origin's extensive coal bed methane reserves and resources and operational capabilities with ConocoPhillips' proven LNG and coal bed methane development and operating capabilities. We believe the joint venture will deliver both companies with a strong and competitive position in a rapidly growing market for LNG."

Origin Energy estimates a gross resource base of 42 trillion cubic feet (tcf) of coal bed methane, including 17 tcf of prospective resources, located in the Bowen and Surat basins in Queensland. Based on this total resource, the transaction value is $0.38 per mcf. Four or more LNG trains, utilizing ConocoPhillips' proprietary Optimized Cascade(SM) LNG technology and each processing an estimated nominal 3.5 million tons of LNG per year, are anticipated. An estimated 20,500 wells are envisioned to supply both the domestic gas market and the LNG development.