Origin doubles oil and gas output, revenue

Origin Energy has delivered a jump in fourth-quarter oil and gas production and revenue as gas prices rose.

Origin Energy’s APLNG plant at Gladstone ran full tilt, helping it double its gas output.

Origin Energy has delivered a jump in fourth-quarter oil and gas production and revenue after the Australia Pacific LNG plant at Gladstone ran full-tilt and domestic and export gas prices rose.

Origin also unveiled a new drilling plan in the Otway Basin off Victoria for its Geographe and Thylacine fields, which are part of Lattice Energy, the business unit comprised of non-core oil and gas assets that Origin is attempting to offload through a float or trade sale.

But the quarterly figures from the Sydney-based oil, gas and electricity seller are not quite as strong as they look.

Origin said June-quarter oil and gas sales, which include LNG exports but not gas retail income, rose 20 per cent from the previous quarter to $673.4 million. This was double the previous year’s fourth-quarter revenue of $326.2m.

The boost came as it exported more from its 37.5 per cent-owned Australian Pacific LNG project at Gladstone, which for two of the three months of the quarter ran at 110 per cent of nameplate capacity because of a 90-day production test that continued through most of July.

Origin also produced more from Bass Strait at its Halladale and Speculant wells in the Otway Basin. As a result, Origin’s sales volumes were up 15 per cent from the March quarter to 92.4 petajoules.

Also in the Otway, Origin revealed it was studying an appraisal and development campaign to extend the life of its Otway gas project.

What makes the report not quite as strong as the volume and revenue headline numbers suggest is the fact that Origin purchased extra gas from the Santos-led Gladstone LNG project so it could run the APLNG plant at higher than nameplate production.

Origin also pointed to production problems at Shell’s Queensland Gas Company, which operates the Queensland Curtis LNG plant and operates CSG fields Origin has an interest in. Shell last week revealed there were some field issues at QGC but did not expand on that.

Origin said its average wholesale domestic gas price received (outside the APLNG project) was $5.68 per gigajoule, up from $5.62 the previous quarter.

LNG prices rose to $US6.97 per million British thermal unit, from $6.72, and crude oil prices slipped to $71 a barrel, from $77.

“The substantial uplift in production and sales revenues for the year reflects strong operational performance across our upstream operations,” Origin chief Frank Calabria said.

RBC analyst Ben Wilson said the quarter was broadly in line with expectations. “Sales were better than anticipated due to an overlift across domestic gas, which was largely driven by increased third party purchases over the period,” Mr Wilson said.