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PERTH (miningweekly.com) – ASX-listed Origin Energy has swung into the red, with the company reporting a statutory loss of A$25-million for the first half of 2015, compared with a profit of A$322-million in the previous corresponding period.
The oil and gas producer on Thursday reported a A$53-million impairment on its New Zealand onshore assets, and added that the depreciation of the Australian dollar on the fair value of financial instruments and debt, as well as interest expense, also added to the noncash impairment charges.
“We have previously stated that the 2015 and 2016 financial years will be transitional for Origin as the energy markets businesses mature and the liquefied natural gas (LNG) production in Queensland starts,” said Origin chairperson Gordon Cairns.
“The impact of this transition is evident in the half-year performance with Origin’s use of ramp gas in Queensland driving an increased contribution from our energy markets business in Australia, offset by a reduction in contribution from our exploration and production business.”
Underlying earnings before interest, taxes, depreciation and amortisation reached A$1.08-billion, driven by the 22% increase in the contribution from the energy markets division, to A$617-million, but offset by a 31% decline in the contribution from exploration and production, to A$208-million.
Cairns said the result was owing primarily to Origin maximising the use of ramp-up gas from Queensland, which meant the company used less of its own gas from production. The consequential reduction in associated liquids production, along with lower liquid process, substantially reduced the contribution from liquids production in this period.
Meanwhile, Origin’s key priorities for 2015 remained unchanged, despite the significant reduction in oil prices. The ASX-listed company said that it would focus on improving the returns of the energy market business, while delivering growth in its natural gas and LNG businesses, and also growing the capabilities and increasing investment in its renewable energy sector.