Origin to divest assets into new oil and gas business

Origin Energy plans to divest its upstream business assets in an effort to reduce debt and focus on its energy markets and gas business.

These assets will be transferred through an initial public offering (IPO), with NewCo to be listed on the ASX.

Origin chairman Gordon Cairns said the divestment would “allow the company to focus on its energy markets and the simplified integrated gas business”, as well as cut down debt.

“Given Origin’s ability to invest capital in the NewCo assets is constrained, their long term value will be better supported by them being an independent business,” Cairns added.

At IPO, NewCo will be a mid-cap exploration and production company with a mix of production and exploration assets, according to Origin. It will have an independent board and a management team.

NewCo’s assets will include a 67 per cent interest in the Otway gas project and various exploration permits; a 100 per cent interest in the Halladale and Speculant gas fields offshore Victoria and Tasmania; a 42.5 per cent interest in the BassGas project offshore Victoria; and interests in the Cooper Basin and Perth Basin, including a 50 per cent interest in the Waitsia gas project and a 67 per cent interest in Beharra Springs.

Origin also has shares in offshore New Zealand, including the Kupe Gas project and Canterbury exploration, as well as interests in the Bonaparte basin.

However, Origin will not divest interests in Australia Pacific LNG, Ironbark and the Browse and Beetaloo basins. It is expected that NewCo will list next year.