Origin Energy to spin-off oil and gas business

Company News

by David Chau

Origin Energy Ltd (ASX:ORG) has announced plans to divest its conventional oil and gas assets, which are estimated to be worth over $1.8 billion.

These assets will be spun-off into a new company called Newco, which will be listed on the ASX next year.

Origin’s chairman, Gordon Cairns, says divesting the company’s conventional upstream business will allow it to focus on its Energy Markets business, and accelerate the reduction of its debt. However, Mr Cairns, did not say how much debt would be reduced by under this plan.

Origin says that Newco will be a mid-cap, geographically diversified upstream exploration and production company, and it will have an independent board. Also, this proposed IPO will not require approval from Origin’s shareholders.

Origin Energy posted a net loss of $576 million at 30 June 2016.
 

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