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Origin continues divestment with upstream IPO

NewCo will include Origin’s interests in the Otway Gas Project, BassGas Project, Kupe Gas Project, and the Perth, Cooper, Bonaparte and Canterbury basins while Origin will retain its interests in Australia Pacific LNG, Ironbark and the Browse and Beetaloo basins.

The aim of the divestment of the conventional upstream business is to allow Origin to focus on its Energy Markets business and the simplified Integrated Gas business.

“The divestment of Origin’s conventional upstream business will be a major step towards restoring the company’s financial flexibility and is expected to improve Origin’s return on capital,”? said Origin CEO Frank Calabria.

“The Energy Markets business will continue to be focussed on driving improved earnings through our customer led strategy combined with a competitive wholesale cost of energy.”?

The proposal accelerates Origin’s debt reduction and reduces its ongoing capital expenditure requirements.

Contracts will be put in place with NewCo to provide Origin with access to existing resources and rights over undeveloped resources in support of its east coast gas portfolio.

The transaction is expected to be Earning per Share (EPS) accretive from FY19 and to deliver an improved return on capital to Origin from completion.

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