Origin energy preparing for $533 million impairment hit

Written on the 8 February 2018 by David Simmons

Origin energy preparing for $533 million impairment hit

Origin (ASX: ORG) has flagged a $533 million hit on its 2018 half year results following impairment charges for its Ironbark gas field and its recently sold Lattice Energy business.

The company expects a $360 million impairment for the Ironbark gas field because of a downgrade in its reserves and a revised development plan.

The company says these charges follow a detailed operations review into the Ironbark field.

"The reserves revision follows a detailed assessment of the Ironbark gas field applying updated assumptions consistent with the technical review of Australia Pacific Liquefied Natural Gas' reserves carried out in June 2017," says Origin in an ASX statement on Thursday.

The company also expects a $172 million non-cash post-tax impairment charge for Lattice Energy. This is as a result of recognising the conventional oil and gas business' earnings from July 1 2017 to January 31 2018.

The company last week completed the sale of Lattice Energy to Beach energy for $1.6 billion.

As part of the deal Origin secured access to a significant portion of Lattice's future east coast gas production through long-term gas supply agreements.

Origin is due to release its half year results on February 15.

Shares in Origin Energy are down 2.01 per cent to $8.77 per share at 12.26pm AEDT.

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Business News Australia

Author: David Simmons





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