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BRIEF-Origin Energy to divest conventional upstream business via IPO

Published 06/12/2016, 08:48 am
Updated 06/12/2016, 08:50 am
© Reuters.  BRIEF-Origin Energy to divest conventional upstream business via IPO
ORG
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Dec 6 (Reuters) - Origin Energy Ltd ORG.AX :

* Its intention to divest conventional upstream business via initial public offering (IPO) with newco to be listed on australian securities exchange

* Proposal accelerates origin's debt reduction and reduces origin's on-going capital expenditure requirements

* New company ('newco') will be a mid-cap geographically diversified upstream exploration and production company listed on ASX

* Transaction expected to be earnings per share (eps) accretive from fy19 and to deliver an improved return on capital to origin from completion

* Newco will have an independent board

* Proposed IPO will not require origin shareholder approval and a listing of newco is targeted for 2017

* Both LNG trains in Australia Pacific LNG project are now in operation and integrated gas business is continuing to focus on reducing costs

* On completion, expected that proceeds of newco ipo will also be used to close out two oil forward sale agreements that co entered into in FY13

* Based on current market pricing, estimated cost to close out these contracts is around $350 million Source text for Eikon: Further company coverage: ORG.AX

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