An Australian gas company is set to sell the majority of its assets, including its core assets in Victoria and Queensland, to pay for its acquisition of the world’s biggest natural gas field.
The move follows the completion of the second phase of the $1.7 billion gas field in the Kimberley region, which was purchased by Origin Energy.
The $1bn deal, which will see the bulk of the company’s assets sold to the company, is the biggest asset sale in the gas industry in the country’s history.
Origin Energy has sold a number of assets in the past, including gas storage, its gas processing plant in the Hunter Valley, and its petrochemical facilities in New South Wales and Victoria.
The deal, announced on Monday, was a significant step forward for the gas sector in Australia, and is a testament to the continuing progress made by the company and its management.
“We are delighted to have completed the sale of the bulk assets at the completion and will continue to make significant investment in the future,” said Origin CEO David Whelan.
“The acquisition of this gas field has shown that the company is now able to compete on the world stage, and we are confident that we will be able to continue to achieve our mission of developing the next generation of gas resources.”
The acquisition was approved by the Australian Securities and Investments Commission (ASIC) on Friday, and the sale was finalised on Monday.
The company said the sale had “a significant impact on the operations and future of the Australian gas market”.
The company will continue its operations at its current sites in Victoria, New South and Queensland.
“Our goal has always been to ensure that the resources we acquire in the next 10 years are not wasted,” Mr Whelans said.
The purchase will see Origin Energy sell its core business assets, and it is understood the bulk will be sold to a private equity firm. “
I want to thank the entire Origin team and the Australian public for their patience as we work through this challenging time in the life of Origin.”
The purchase will see Origin Energy sell its core business assets, and it is understood the bulk will be sold to a private equity firm.
The bulk of its holdings, worth $4.6 billion at the time of the acquisition, will be re-exported to the United States.
“This acquisition will provide a solid foundation for our long-term strategic vision for our Australian gas business,” Mr Hutt said.
The Australian Bureau of Statistics (ABS) estimates that the $6.4 billion purchase price paid by Origin will result in net debt servicing of $3.5 billion.
Origin said it would be taking a $3 billion charge to the A$5.7bn debt, and would pay this in instalments over the next two years.
Origin has also agreed to pay a $250 million credit to its existing Australian capital markets creditors, and will provide $3 million in cash to the Australian Bankers Association.
“It has been a challenging time for us, but the acquisition of Origin’s assets in Western Australia has given us the confidence to continue in our business and to build on our strong foundations in Victoria,” Mr Dickson said.
Origin’s acquisition of Victoria’s gas resources has been in the pipeline for more than a decade, and was approved in 2010.
It was expected to be completed by 2021.
Mr Hutton said the acquisition would “provide a strong foundation for the future development of Origin”.
“We will be working with our Australian partners to ensure we can remain competitive with our competitors and ensure we deliver a strong and resilient future for Origin,” he said.
Mr Whetton said the purchase of the gas field was a positive step in the “long road” for Origin, and that it would give the company a competitive advantage over competitors in the field.
“With the acquisition and continued growth of our gas operations, it is now possible to compete with our competition in a very competitive industry, and for that we can all be very proud,” he added.