Origin Energy's conventional oil and gas business Lattice Energy will lift its stake in the Otway gas project and related exploration fields in Victoria after agreeing to buy out joint venture partner Benaris.
Origin will pay Benaris $190 million for the 27.77 per cent stake in the gas project and a 29.23 per cent interest in two exploration joint ventures.
The acquisition, effective from July 1, will lift Lattice Energy's stake to 95 per cent in the Otway project and 100 per cent in the exploration ventures.
Japan's Toyota Tsusho holds a five per cent stake in the Otway project.
Origin is in the process of divesting Lattice Energy - either through an initial public offer or a sale - in an effort to streamline its business and reduce debt.
It expects to complete the divestment within 2017.
The current transaction will help simplify the ownership structure of the joint venture ahead of the Lattice divestment and help facilitate the future development of the assets, Origin said.
The oil and gas producer had acquired the stake in the Otway project and production licences for the Thylacine and Geographe fields along with adjacent exploration permits from Woodside Petroleum in 2009.
Origin will also pay Benaris $60 million through a separate agreement to rebalance the share of gas between the parties, allowing Lattice to increase its oil and gas reserves by 11.89 petajoules.
By 1100 AEST, Origin Energy shares were up 0.4 per cent to $7.78 in a firm Australian market.
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