Origin Energy Flags A$533 Million Impairment Hit
By Robb M. Stewart
MELBOURNE, Australia--Origin Energy Ltd. (ORG.AU) has flagged another round of impairment charges, this time to reflect its exit from a portfolio of conventional oil-and-gas assets and for revisions to its expectations for a natural-gas field in eastern Australia.
The energy company said Thursday it expects to book an impairment hit of 533 million Australian dollars (US$421.4 million) in its first-half results, due to be released in a week.
In the last financial year, through June 2017, Origin was pitched to a sharply wider net loss of A$2.23 billion on the back of A$3.1 billion in impairment charges, including further costs in the second half of that year for its flagship Australia Pacific LNG project and A$357 million for the assets that were then up for sale.
On Thursday, Origin said it expected a A$173 million charge after recognizing earnings for the assets, which were formally exited earlier this year in a A$1.59 billion deal with Beach Energy Ltd. (BPT.AU)
Origin said it also expected a A$360 million impairment charge for the half-year after lowering reserves and revising the development plan for its Ironbark gas field in the Surat Basin. The carrying value of Ironbark development is now expected to be A$279 million, and it continued to look at options to bring its gas to the market.
The charges for the period are considered non-cash, and will have no impact on underlying earnings before interest, tax, depreciation and amortization for the full year, the company said.
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February 07, 2018 17:24 ET (22:24 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.