Origin’s Exploration and Production business increases sales volumes, revenues and reserves
Origin Energy Limited (“Origin”) today announced increased annual sales volumes and revenues for its Exploration and Production business and a 38 per cent annual increase in its total Proved plus Probable (“2P”) reserves.
The details were released in Origin’s Quarterly Production Report for June 2010 and the 2010 Annual Reserves Report.
Origin’s Exploration and Production business achieved annual production of 104 petajoules equivalent (“PJe”) in line with the prior financial year while sales revenues, on a proportionately consolidated basis, increased by 10 per cent to $632 million. This was despite the 50 per cent dilution of its interest in coal seam gas production from Australia Pacific LNG in October of 2008.
Origin’s net 2P reserves increased 38 per cent to 6,207 petajoules equivalent. Australia Pacific LNG, in which Origin has a 50 per cent interest, increased total 2P reserves by 40 per cent from 7,265 PJ at 30 June 2009 to 10,143 PJ at 30 June 2010 (Origin share 5,071 PJe). In addition reserves increases were noted for the Kupe and Otway gas projects.
Origin’s Executive Director, Finance and Strategy, Ms Karen Moses, said, “Over the last few years Origin has deployed substantial capital and resources in the Exploration and Production business. In particular commencement of the Kupe Gas Project in New Zealand and an increased equity interest in the Otway Gas Project have made positive contributions to annual production.”
These contributions were partially offset by the dilution of Origin’s interest in Australia Pacific LNG and lower production levels from the Cooper Basin, the BassGas Project, the Perth Basin and the onshore Taranaki Basin.
The Kupe Gas Project recorded a full quarter of commercial production and produced its one millionth barrel of light crude oil or condensate. A review of development drilling results, early field production performance and field reservoir models has resulted in an initial 2P reserves upgrade of 11 per cent or approximately 43 PJe, driven mainly by a 27 per cent increase in reserves of light oil. Origin’s share of this increase in initial reserves was around 21 PJe, including approximately 2 million barrels of light oil.
“Australia Pacific LNG project continues to meet major milestones. The significant increase in Australia Pacific LNG’s CSG reserves reconfirms that this is a large scale, high quality resource. In addition the Environmental Impact Statement is well progressed, Front End Engineering and Design studies are well advanced and supply to new domestic contracts has commenced including the Darling Downs Power Station and the expansion of Rio Tinto Aluminium’s Yarwun refinery.
“We have also created a strong exploration portfolio over the past year with four out of six offshore or international wells encountering hydrocarbons.
“We have diversified our exposure including a commitment of US$50 million to securing interests in Lao PDR, Thailand and Vietnam with the experienced south east Asian operator Salamander, and the farming-out of a 50 per cent interest in the Canterbury Basin in New Zealand to Anadarko,” said Ms Moses.
NOTE: The report does not cover other areas of the integrated energy businesses undertaken by the company, including electricity generation, energy retailing or its subsidiary Contact Energy of New Zealand.
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