Origin: Agreement entered with Beach for Lattice sale
Origin Energy has advised that it has entered into an agreement to sell Lattice Energy, its conventional upstream oil and gas business, to Beach Energy for $1.59 B.
Under the sale's terms, the transaction will have an effective date of July 1, 2017, with completion subject to satisfaction of customary conditions, including approvals from the New Zealand Minister of Energy and Resources and the New Zealand Overseas Investment Office, Origin stated.
“In signing these agreements today, we have delivered on our commitment to divest Lattice Energy consistent with our plan to simplify the Origin business, reduce debt and improve returns to shareholders,” Origin CEO Frank Calabria commented. “Importantly, Origin retains access to future Lattice Energy east coast gas production and LPG, to help us continue to meet the energy needs of our domestic customers.
“The sale to Beach represents the best overall value to Origin shareholders, through the combination of the upfront sale proceeds and ongoing supply of gas and LPG, which allows Origin to retain the benefits of our integrated business model.
“Origin and Beach have a long history of working together through joint ventures and existing gas supply arrangements, and we look forward to continuing that relationship, as Beach will remain a major supplier of gas to Origin into the future.”
Origin advised that proceeds from the sale will be used to pay down debt, which it states puts it on track to reduce adjusted net debt to below $7 B by June 30, 2018.