PERTH (miningweekly.com) – ASX-listed Origin Energy on Thursday warned of a non-cash impairment and capital gains tax expense of between $190-million and $200-million for its half-year results.
The expected non-cash impairment relates to the sale of a 10% interest in the Australia Pacific liquefied natural gas (APLNG) project.
Energy major ConocoPhillips exercised its pre-emptive rights in relation to Origin’s sale of a 10% interest in the APLNG project, after Origin in October struck a $2.12-billion agreement with global energy investor EIG to sell a 10% stake in the APLNG project.
On completion of the transaction, which is expected in the first quarter of calendar year 2022, this expected impairment charge will be partially offset by the release of a $100-million to $110-million benefit from the foreign currency translation reserve.
Capital gains tax expense of $170-million to $180-million is also expected to be incurred from the transaction, net of tax benefit from the utilisation of capital losses. No significant cash tax payment is expected as a result of offsetting tax deductions.
Origin has previously said the sale of the 10% interest allowed Origin to crystalise some of the significant value in APLNG, while retaining upside to further value creation through a continuing substantial shareholding.