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Origin Energy takes another $1.2bn hit over LNG investment

By business reporter Stephen Letts

Posted 51 minutes ago



Key points:


Origin 2017 FY loss likely to be $2.5bn after another big write down announced

Falling oil prices are likely to contribute to almost $3.8bn in losses over the past three years

Origin share price has halved since 2014, in line with the decline of the oil price


Origin Energy is on track to post another heavy full-year loss, in the order of $2.5 billion, after taking the knife again to the value of its assets.


Ahead of next week's full-year profit release, Origin announced a further $1.2 billion of impairment charges against its stake in the Australia Pacific LNG (APLNG) project and the value of a collection traditional oil and gas assets that have been bundled together to be spun-off as Lattice Energy.


The new write-downs follow the $1.9 billion worth of impairments announced at Origin's half-yearly results in February.


The consensus forecast from analysts covering Origin is it will churn out underlying full-year earnings of around $520 million.


Factoring in the write-downs, Origin is likely to report a full-year loss of around $2.5 billion, taking the cumulative loss since 2015 to around $3.8 billion.


It will also be around $9.5 billion below Origin's record full-year profit in 2009 which was inflated by the sale of a large stake in the APLNG project to the energy giant Conoco Phillips.


The write-down is part of a regular biannual review of the value of assets ahead of results.


Recent results have been brutalised by declining oil prices which have more than halved since mid-2014. Origin's share price has also halved to around $7 per share over the same period.


more details... http://www.abc.net.au/news/2017-08-10/orig...estment/8794686

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  • 4 months later...

from today's The Age


Morgan Stanley raised its share price target for Origin Energy to $10.88 from $8.88 and maintains its "overweight" recommendation.


The broker outlines five factors favouring the stock in 2018, including benefiting from a planned spending reduction at the $25 billion Australia Pacific LNG project in Queensland. Beyond that, Origin has a profile of improving margin within its gas business in a tight domestic market for gas; benefits from rising retail energy prices; and stands to gain from the falling cost of renewables. Finally, its market multiple is still being positively re-rated to 14.8 times earnings over the last half from a low of 12.4 times. Morgan Stanley's price target implies a 2018-19 price-earnings multiple of of 17.2.


Origin shares traded at $9.55, up 1.2 per cent on Wednesday.


Currently SP @ $9.575/share


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  • 3 months later...
The Northern Territory government has lifted a ban on hydraulic fracturing (fracking) of onshore gas that will open up more than half of the territoryÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s land mass to the controversial practice.


The first exploration fracking by petroleum companies is expected to occur early next year after the implementation of a regulatory regime and new laws, which the government insists will be strict.

Gas explorers such as Origin Energy, which is itching to resume drilling on high-potential areas for gas such as the Beetaloo and McArthur Basins warmly welcomed the "sensible and fact-based decision".


Origin's head of integrated gas Mark Schubert said the company it would resume exploration work in the Beetaloo "as soon as practical", adopting the recommendations of the inquiry and gaining the required approval...

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