22 December 2015
Origin reduces exposure to low oil prices
Origin Energy Limited (Origin) today advised it has taken steps to reduce the Company’s exposure to low oil prices by purchasing put options on oil (Oil Puts) for the 2017 financial year and forward selling LNG cargoes at a fixed price. Both transactions are designed to mitigate a substantial proportion of Origin’s share of exposure to oil prices on volumes Australia Pacific LNG sells under existing contracts and to spot LNG prices on volumes above contracted commitments.
The Oil Puts provide Origin with the right to sell 15 million barrels of Japan Customs-cleared Crude (JCC) at a strike price of A$55/bbl for 75 per cent of the volume and US$40/bbl for 25 per cent of the volume. The cost of the Oil Puts is $82 million after tax and will be expensed in Underlying Profit in the 2017 financial year. Any payout that Origin receives under the Oil Puts will be recognised in Underlying Profit in that year. Origin believes the volume under the Oil Puts represents a reasonable balance between risk reduction and the costs involved in achieving it.
Senior External Affairs Manager
Ph: +61 2 8345 5119
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Group Manager, Investor Relations
Ph: +61 2 9375 5816
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Origin progresses plans for nation’s largest battery at Eraring Power Station
Origin Energy Limited (Origin) is progressing plans for a battery at Eraring Power Station in NSW, with an overall capacity of up to 700 MW and a dispatch duration of 4 hours, making it the largest battery project currently under consideration in Australia.