Karoon said it would initially receive $600 million cash upon completion of the binding deal.
Origin also agreed to pay $75 million on reaching a final investment decision milestone and another $75 million on first production.
Karoon separately won a deferred resource cash payment of up to $50 million, which is payable on first production.
It is calculated on Origin paying $5 million for every 100 billion cubic feet equivalent of independently certified 2P reserves that exceed 3.25 trillion cubic feet equivalent across the two blocks by FID, with this capped at $50 million.
Origin further committed to paying all of Karoon's costs associated with the Pharos-1 exploration well that is underway along the Greater Poseidon trend.
Karoon said the deal over the blocks WA-315-P and WA-398-P remained subject to pre-emptive rights from its joint venture partners (ConocoPhillips 40%, PetroChina 20%), as well as regulatory approval.
The explorer is expecting the deal, which follows 12 months of negotiations with various international players, to reach completion in the September quarter.
"This offer is a clear demonstration of the value created for Karoon's shareholders by executing on the core business strategy," Karoon said.
"The subsequent balance sheet flexibility allows Karoon to pursue the planned near-term high impact oil appraisal and exploration programs in the Santos, Carnarvon and Tumbes basins."
Karoon aims to advance the Kangaroo oil discovery in Brazil's offshore Santos Basin upon receiving the funds and "pending a successful outcome from the Kangaroo-2 appraisal well".
Origin's Poseidon views
Having outbid various players, which could include PetroChina, Royal Dutch Shell, Woodside and Thai giant PTT according to recent press speculation, Origin said the options to monetise the Poseidon field included piping the gas to LNG operations in Darwin or stand-alone floating LNG development.
Origin managing director Grant King said the deal gave the company a strategic position in one of Australia's largest recent offshore gas discoveries at a "competitive entry price when compared to recent transactions in the Browse/Bonaparte region".
