Origin to sell Upstream Oil and Gas Business Lattice Energy for AUD 1.585bn.
M2 EQUITYBITES-September 29, 2017-Origin to sell Upstream Oil and Gas Business Lattice Energy for AUD 1.585bn
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29 September 2017 - Australian integrated energy company Origin Energy (ASX: ORG) has entered into an agreement to sell its conventional upstream oil and gas business, Lattice Energy, to Beach Energy (Beach) for AUD 1.585m (USD 1.24bn), the company said.
As part of the sale, Origin has secured access to a significant portion of Lattice Energy's future east coast gas production under long-term gas supply agreements to support its domestic gas business.
Under the terms of the sale, the transaction will have an effective date of 1 July 2017.
Completion is subject to satisfaction of customary conditions, including approvals from the New Zealand Minister of Energy and Resources and the New Zealand Overseas Investment Office.
Proceeds from the sale will be used to pay down debt, putting Origin on track to reduce adjusted net debt to below AUD 7bn by 30 June 2018.
Net proceeds will also reflect the acquisition of Benaris' interests in the Otway basin, transaction costs and the closing out of two oil forward sale agreements that Origin signed in FY2013, estimated to be AUD 270m depending on oil price at the time of completion. Gas supply arrangements.
As part of the sale, Origin has entered into agreements with Lattice Energy to secure access to long-term gas supply.
Origin Energy is an energy retailer with approximately 4.2m customer accounts. It has approximately 6,000mw of power generation capacity and is also a large natural gas producer.
The company is the upstream operator of Australia Pacific LNG, its incorporated joint venture with ConocoPhillips and Sinopec, which supplies natural gas to domestic markets and exports LNG under long term contracts.
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|Publication:||M2 EquityBites (EQB)|
|Date:||Sep 29, 2017|
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