Origin Releases Quarter Report Highlighting Performance in Integrated Gas Segment

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Origin Energy has released its Quarterly Report for the period to 31 March 2021, covering the performance of its Integrated Gas and Energy Markets divisions.

According to CEO Frank Calabria, the stand out performance in the Integrated Gas division was attributable to higher realised prices.

“The performance of Integrated Gas continues to stand out, with higher realised prices driving an increase in revenue this quarter and Australia Pacific LNG shipping its 600th cargo to customers. Due to the lag in the LNG contracts, we expect recent higher oil prices to flow through to contract revenues in the 2022 financial year,” said Frank Calabria.

“The combination of strong production and operating and cost discipline has helped to reduce the FY2021 distribution breakeven, with full-year cash distributions to Origin expected to be greater than $650 million. Exploration continues in the Beetaloo Basin, including planning for an extended production test at the Kyalla-117 well in late FY2021 and drilling the Velkerri-76 vertical well in early FY2022, both targeting liquids-rich gas,” he added.

With the Energy Markets division, Calabria noted the impacts of COVID-19 and mild summer weather delivered lower demand.

“In Energy Markets, continued impacts of COVID-19 as well as very mild summer weather contributed to subdued demand and wholesale pricing across electricity and gas markets. Electricity demand is down 4 per cent year on year and gas demand down 27 per cent, with COVID still impacting service sector business volumes and demand for gas fired generation in particular”, said Mr Calabria

“We continue to target significant retail cost savings and are on track to achieve $100 million in savings by the end of FY2021. We’re pleased to see growth in Origin customer accounts over the period, particularly in Community Energy Services and natural gas as well as impressive growth at Octopus Energy, as it adds more than 100,000 customers per month in the UK and expands into new markets like Japan,” Mr Calabria added.

The following key points were included in the ASX Announcement:

Integrated Gas:

  • March quarter production down 4 per cent from December quarter due to planned maintenance activities in operated fields, and two less days in the quarter.
  • Commodity revenue up 7 per cent from December quarter driven by higher realised oil and spot LNG prices. Sales volume declined 6 per cent with lower production and timing of cargoes.
  • March quarter realised gas sales price was A$7.05/GJ, comprising an average LNG price (contracted and spot) of US$6.45/mmbtu (A$7.89/GJ) and an average domestic price of A$4.03/GJ (legacy and short-term contracts).Energy Markets:
  • Electricity sales volume reduced 4 per cent on the March 2020 quarter: Retail down 4 per cent due to milder weather and lower usage; Business volumes were also 4 per cent lower with COVID-19 impacts partly offset by new contract wins.
  • Gas sales volumes decreased 27 per cent on the March 2020 quarter: 19 per cent decrease in the business segment due to expiration of contracts and COVID-19 impacts; Retail volumes were flat with higher customer numbers offsetting lower small business usage. Gas used in generation fell 59 per cent due to lower electricity pool prices.

For more information, please visit the announcement.