Origin Gets Strong Boost from APLNG
Origin Energy’s stake in the Australia Pacific LNG terminal in Queensland has helped drive a 40% year on year lift in revenue for the company for the July-December period and 12% increases in both production and sales, Origin said January 31.
“Australia Pacific LNG continued to perform well, delivering reliable upstream and downstream production in the December quarter. This is demonstrated by a total of 35 LNG cargoes loaded and shipped from Curtis Island, with the milestone of our 200th LNG cargo successfully loaded on 1 January 2018,” Origin CEO Frank Calabria said.
Origin’s revenue for the last six months of 2017 stood at A$1,364.9mn ($1.1bn), up by 40% from a year earlier. Production and sales volumes both rose by 12% to 172.6 petajoule and 180.4 PJ respectively.
For the quarter ending December 2017, the company’s revenue was A$686.4mn, which is up by 26% from a year earlier and 1% higher than in July-September 2017. Production of 83.5 PJ was 4% up year on year and down 6% from the July-September period and sales of 88.9 PJ showed an 8% year on year rise and a 3% quarter on quarter fall.
Origin is the upstream operator of APLNG and is responsible for the development of coal seam gas fields in Australia’s east coast Surat and Bowen basins. The APLNG facility saw a total production during the quarter of 885,700 metric tons, which is up from 656,700 metric tons in the corresponding quarter during 2016 and from 825,900 metric tons in the September quarter.
“Another strong quarter for APLNG production and sales – 2QFY18 is the highest quarterly production recorded to date and implies an annualised run rate of 9.4mn metric tons/pa versus nameplate capacity of 9mn metric tons/pa as measured at the plant inlet valve,” RBC Capital Markets analyst Ben Wilson said.
Origin reported an average LNG price during the quarter of $7.14/mm Btu, up from $6.43/mm Btu a year earlier and down from $7.34/mm Btu in the September (3Q2017) quarter.
Meanwhile the company also announced January 31 that it has completed the A$1,585mn sale of its conventional upstream oil and gas business, Lattice Energy, to fellow Australian company Beach Energy with an economic effective date of July 1, 2017.
“After adjusting for settlement of the acquisition by Lattice Energy of Benaris’ interests in the Otway basin ([A]$190mn), transaction costs, adjustments and taxes, the balance of the sale proceeds will be used to close out of oil forward sale agreements ($266mn) and pay down debt (approximately [A]$1bn),” Origin said.
As a result of the transaction, Origin expects to record accounting charges of approximately A$220mn-A$240mn, primarily comprising a non-cash post-tax impairment charge of A$170mn-A$180mn as a result of recognising Lattice Energy earning from July last year, Origin said.