Origin reveals $3.3 bln capital measures

Australian oil and gas company Origin Energy has announced a number of asset sales and capital measures worth AUD4.7 billion ($3.3 billion). The fundraising is aimed at balancing a budget weighed down by debt and hit by the drop in price for crude.

“It has become clear through July and August that as oil prices fell further, equity markets have become more volatile, and at the end of the day we just have to reduce the absolute level of debt in Origin,” the company’s managing director Grant King said to the Sydney Morning Herald on Wednesday. “The only way to absolutely reduce that debt, quickly, today, is to raise equity. We couldn’t, in a sense, sell our way to that position.”

Origin is selling its stake in the Cooper and Perth basins, several exploration permits, and pipelines. The company aims to reduce its capex by $700 million by limiting itself to joint ventures and existing permit commitments.

On Tuesday, Origin announced it was dropping its interest in block 121 offshore Vietnam.

The $25-billion Australia Pacific LNG project, set to come on stream in 2017, is Origin’s largest ongoing venture. Origin holds a 37.5-percent stake in the project.

Photo courtesy of Australia Pacific LNG.

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