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Origin to sell part of future production

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PERTH, Dec 21 AAP

December 21 2012, 3:49PM

Origin Energy has agreed to sell part of its future oil and condensate production for $US300 million ($A287.40 million).

Queensland's largest energy provider on Friday said the price was linked to the current oil forward pricing curve and the funds would be used to retire existing drawn debt.

Goldman Sachs is handling the transaction.

Origin executive director of finance and strategy Karen Moses said under the terms of the agreement Origin had agreed to sell a portion of oil and condensate from its Australian East Coast and New Zealand production assets from 2015.

"The agreement allows Origin to realise value today from its future oil and condensate production, which is a by-product of the company's core gas production business," Ms Moses said in a statement.

She said the transaction was consistent with Origin's strategy to identify new pathways to monetise the company's portfolio of fuel resources.

Ms Moses added that the deal demonstrated Origin's focus on maximising cash flow from the existing business.

In a separate transaction on Thursday Origin announced that it had signed a long-term gas sales agreement with the MMG Group.

Origin will supply MMG with up to 22 petajoules of gas from its east coast portfolio over seven years, starting with the supply to the century mine.

Origin is focused on gas and oil exploration and production, power generation and energy retailing.

The company and partner ConocoPhilips each have a 37 per cent stake in building the $20 billion Australian Pacific LNG project in Gladstone.

Shares in origin were 15 cents lower at $11.56 at 1520 AEDT.