29 January 2021

Quarterly Report December 2020

Integrated Gas: record production and increased revenue for the quarter

  • Record production by Australia Pacific LNG, rising 6 per cent from the September quarter in response to increased market demand and completion of planned maintenance.
  • Commodity revenue increased 6 per cent during the quarter as higher volumes offset lower realised contracted LNG prices. Sales volumes increased 12 per cent, with increased demand resulting in less banking of non-operated production and a draw down on LNG inventory.
  •  December quarter realised gas price was A$6.17/GJ, comprising an average LNG price (contracted and spot) of US$5.20/mmbtu (A$6.70/GJ) and an average domestic price of A$4.40/GJ.
  • Cash distributions received from Australia Pacific LNG amounted to $265 million in the period.
  • Notice of Discovery lodged with Northern Territory government, with encouraging initial results from the Kyalla well in the Beetaloo. Further work is required to enable it to flow continually without assistance before commencing extended production testing during the dry season.
  • Announced a farm-in to prospective Canning Basin with an expected spend over two years of $35 million and options to assume operatorship for any significant gas and CCS developments.

Energy Markets: electricity volumes lower, gas volumes higher for the quarter

  • Electricity sales volume reduced 4 per cent on the December 2019 quarter: 5 per cent decrease in Retail due to milder weather, lower usage, and lower SME customer numbers; Business volumes 3 per cent lower with COVID-19 impacts partly offset by new contract wins.
  • Gas sales volume increased 1 per cent on the December 2019 quarter: 16 per cent increase in the business segment as contract wins more than offset a 6 per cent decline in retail largely due to COVID-19 impacts on SME and milder weather; gas used in generation fell 29 per cent.
  • Announced an additional ~$65 million investment in Octopus Energy to maintain Origin’s 20 per cent equity interest following a partnership between Octopus and Tokyo Gas that will see the launch of Octopus into Japan and Tokyo Gas take a 9.7 per cent stake in Octopus for US$200 million.

Origin CEO Frank Calabria said, “Strong gas production at Australia Pacific LNG for the quarter eclipsed the previous record, which combined with higher prices on short term domestic and LNG spot sales offset the lagged impact of lower oil prices under long term LNG contracts.

“We are encouraged by initial results in the Beetaloo, which met our primary objective to flow liquids rich gas to surface and confirmed elevated liquids yields and low levels of CO2.

“We recently farmed-in to the prospective Canning Basin, giving Origin positions in Australia’s three large prospective onshore basins – the Beetaloo, Canning and Cooper-Eromanga – providing exposure to what we believe are the most prospective shale formations in Australia.

“In Energy Markets, electricity demand in the retail segment has increased 1 per cent for the year to date, as residential customers spent more time at home due to COVID-19. However, we continue to see the impact of the pandemic in the SME and large business segments, particularly in Victoria, with mild summer conditions due to the La Niña weather pattern also impacting demand in the quarter.

“We are making strong progress on our Kraken rollout, passing the milestone of our first 50,000 customers migrated to the new platform in December 2020.

“We are excited by Octopus’ continued growth as it launches into the Japan market in partnership with Tokyo Gas. Tokyo Gas has also taken a 9.7 per cent equity stake in Octopus Energy representing a material value uplift since our initial investment, reflecting the company’s strong performance and impressive growth trajectory,” Mr Calabria said.

Quarterly results overview

 

Unit

Dec-20

Sep-20

% Mvt

Dec-19

% Mvt

FYTD-21

FYTD-20

% Mvt

Integrated Gas – Share of APLNG

       

 

 

 

Production

PJ

68.3

64.2

6%

67.6

1%

132.6

134.1

(1%)

Sales

PJ

64.5

57.4

12%

65.4

(1%)

121.8

128.6

(5%)

Commodity Revenue

$m

398.0

373.9

6%

716.5

(44%)

771.9

1,404.8

(45%)

Average commodity price

A$/GJ

6.17

6.52

(5%)

10.95

(44%)

6.34

10.92

(42%)

Energy Markets

 

 

   

 

 

 

 

 

Electricity sales

TWh

8.0

8.7

(8%)

8.3

(4%)

16.7

17.0

(2%)

Natural gas sales

PJ

58.0

72.0

(19%)

57.2

1%

130.0

134.3

(3%)

Corporate

 

 

 

 

 

 

 

 

 

Origin capex

$m

98

74

32%

162

(39%)

172

258

(33%)

Origin investments

$m

48

1

n/m

5

(67%)

48

8

n/m

Net cash from APLNG

$m

265

-

n/a

425

(38)

265

520

(49)


Contacts
 

 

Media

Tracy Ong

Ph: +61 2 8345 5213

Mobile: +61 408 400 227

 

Investors

Liam Barry

Ph: +61 2 9375 5991

Mobile: +61 401 710 367