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Origin flags $533m impairment hit

Simone Ziaziaris  |  08 Feb 2018Text size  Decrease  Increase  |  
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SYDNEY - [AAP] Origin Energy (ASX: ORG) has flagged a $533 million hit on its 2018 first-half results following impairment charges for its Ironbark gas field and on its recently sold Lattice Energy business.

The electricity and gas company says it expects a $360 million impairment for the Queensland Ironbark gas field, on a post-tax basis, after a downgrade in its reserves and a revised development plan.

"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," Origin said in a statement on Thursday.

"The carrying value of the Ironbark gas field development post the impairment is expected to be $279 million."

Origin also expects a non-cash post-tax impairment charge of $173 million for Lattice Energy, its operations in Otway, Victoria, as a result of recognising the conventional oil and gas business' earnings from July 1 2017 to January 31.

The advice comes after the company last week announced it had completed the sale of the Lattice Energy business to Beach energy for $1.6 billion.

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

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The total impairment charge is subject to finalisation of Origin's half-year financial statements and has no impact on full-year underlying earnings before interest, taxes, depreciation, and amortisation, the company said.

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

At 1050 AEDT, Origin's shares were trading 11 cents, or 1.23 per cent, lower at $8.84.

 

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© 2021 Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

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