Origin delivers surge in LNG revenue

Origin Energy has enjoyed a surge in revenue from its Australia Pacific LNG (APLNG) project in the past financial year driven by higher commodity prices.

Its revenue from the operations increased 36 per cent in the 2019 financial year in response to higher effective oil prices, translating to cash flow of $943 million for the period.

This was higher than the guidance of $850 million and included a 16 per cent dip in quarterly revenue during March as oil prices dropped.

While production remained steady during the financial year, Origin will increase its focus on development in the Beetaloo Basin.

The company is continuing preparatory work for two horizontal appraisal wells planned over the 2019 calendar year.

Origin reported that development at the Kyalla formation continues with a water extraction licence in place and drilling approval anticipated in August.

Water bores are drilled and an access road is near completion alongside the well pad construction, the company reported.

The other formation, Velkerri, also had its water extraction licence in place, with water bore and access roads approved and are awaiting will pad civils and drilling approval.

Origin chief executive officer Frank Calabria said APLNG continued its strong operational and financial performance.

“Pleasingly a number of Australia Pacific LNG gas supply contracts were signed during the quarter with domestic manufacturing customers. This demonstrates the important role the gas industry plays in supporting local industry,” he said.

Origin are anticipating corporate costs in the 2019 financial year to include a non-cash remediation provision increase of $160–$180 million, primarily relating to further on-site assessment of required works at a former gas works site in South Australia.

The company has also provided an update on the $231 million sale of Ironbark to APLNG which is expected to be complete in August, with APLNG reporting it has retained sufficient cash during the 2019 financial year to fund the transaction.

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