Origin Energy has pulled the plug on its on-shore gas exploration activities in the Beetaloo Basin – which it once dubbed as one of the “most promising shale gas resources in the world” – and announced it will sell its current exploration interests in the region.

The company – which has yet to turn the Beetaloo Basin project into a producing asset, since the turn of the decade – will stand to lose between $70 and $90 million from the divestment, but made deals to purchase gas from producers if production increases.

Origin said it had struck a deal with Tamboran Resources Limited and its significant shareholder, Bryan Sheffield, to divest Origin’s interest in the Beetaloo for $60 million and a royalty on future production.

The company will also abandon its remaining upstream gas exploration licenses due to risky and costly endeavours to push projects into the production stage and would instead focus on a “refreshed strategy” to “grow cleaner energy”.

“Notwithstanding the prospectivity of any of these permits, typically the experience in progressing these types of projects is that the exploration and appraisal phase can be uncertain, and it can be capital intensive to bring projects into production,” Origin chief executive Frank Calabria said in a statement.

“Ultimately, we believe Origin is better placed prioritising capital towards other opportunities aligned to our refreshed strategy.”

Mr Calabria said the company would now concentrate on growing cleaner energy and “customer solutions and deliver reliable energy through the transition”.

The Beetaloo was previously touted by Origin as among the most hopeful shale gas resources in the world. Origin is also the largest player in the market testing the commercial viability of the basin’s gas deposits.

The Beetaloo Basin was heralded by the former Coalition federal government as a key to a “gas-led economic recovery” with millions of dollars granted to exploration companies to fast-track operations.

Traditional owners and environmental groups have opposed the project due to concerns that the development will worsen greenhouse gas emissions and contaminate water resources.

Critics of the gas exploration project celebrated Origin’s announcement, with Greens Senator Sarah Hanson-Young writing on Twitter that the decision was a “big blow” for the fossil fuel industry.

Traditional Owner Nicholas Fitzpatrick said while he was pleased with the decision the “fight won’t stop here”.

“We’ve been telling Origin we don’t want fracking on our land that would destroy our aquifers, cultural heritage and contribute to climate change,” he said.

“This fight won’t stop here. We don’t want Tamboran coming in here and fracking our country. They need to respect our demands and end fracking in the Beetaloo.”

Chief Minister Natasha Fyles however played down the decision as not having any significant impact on the viability of Beetaloo region moving forward.

“We certainly are as a government moving towards renewables,” she said.

“But we need to have a sustainable energy supply so that we can transition as a territory and a nation across to renewables.”

Tamboran Resources has launched a $133 million capital raising initiative to pay Origin for the acquisition and drilling in the Beetaloo Basin.

Tamboran’s acquisition now positions the company as a significant player in the domestic gas market. Tamboran is currently covered with a $144 million market capitalisation and owns other unconventional gas resources in the Territory and the Beetaloo.