"BG Group has performed a thorough and balanced assessment of Origin's prospects and is offering an all-cash 72 percent premium to the 90-day VWAP (volume-weighted average price) to the date immediately prior to the announcement of our initial proposal (on April 30)," chief executive Frank Chapman said in a statement.
"We believe Origin shareholders have limited visibility of the risks inherent in Origin's current reserves position and liquefied natural gas joint venture alternatives.
"Today, Origin does not have sufficient CSG (coal seam gas) reserves for a LNG joint venture. There are third-party contractual rights over a large number of Origin's tenements that have not been adequately explained; and Origin's domestic market requirements from CSG exceed the company's currently available proven reserves."
Chapman added there were no operating coal seam methane to LNG plants anywhere in the world and many billions of dollars of capital investment would be needed.
"Under Origin's proposed CSG joint venture, shareholders would therefore bear protracted and material technical, project execution and commercial risks; and such a project, even if successful, would be unlikely to generate any revenues until 2015 or 2016 at the earliest."
Origin had, on May 30, rejected BG's improved $15 per share offer, saying it did not take into account a CSM reserves report that increased Origin's 3P (proven, probable, possible) reserves by 121%.
The report also shows a 91% increase in 2P (proven, probable) reserves, a contingent 2C resource of 13,497 petajoules and prospective resources of 17,947PJ.
However, in its latest offer, BG said Origin's CSG reserves and resources estimate that was announced on May 30, did not present a complete and balanced assessment of the scale and risk of the company's reserves.
The United Kingdom gas major alleged that, according to its analysis, Origin's well density is well below that of its peers and insufficient wells appear to have been drilled to give confidence in the reserves changes.
BG added that Origin's contingent obligation to transfer up to 45% of the reserves and resources in a number of its tenements to a third-party after cost recovery for no payment to Origin could have a potentially material impact on Origin's production, reserves and resources.
BG also knocked Origin's suggestion that Petronas' agreement to buy a 40% stake in Santos' CSM to LNG project for $US2 billion ($A2.1 billion) supported a valuation of Origin's CSM reserves at $16 billion, saying the suggestion fundamentally overstated the value of Origin's CSM assets.
The company said Petronas had bought into an established, integrated LNG scheme under development and that even if all of the Malaysian national oil company's contribution was notionally allocated to the feed gas reserves, the unit price would be around $0.95 per gigajoule rather than the $1.65/GJ quoted by Origin.
BG's original offer for Origin, valued Origin at $14.70 per share.
