Origin has inked a $2.12 billion deal with global energy investor EIG to sell 10 per cent of its majority shareholding in Australia Pacific LNG, reducing its stake to 27.5 per cent.
Origin told the market on Monday morning it estimated the sale’s net proceeds will be $2 billion after adjustments and transaction costs, if the deal is completed by December 31, 2021.
Origin chief executive Frank Calabria said the sale allowed the LNG giant to diversify its asset portfolio.
“Divesting a 10 per cent interest allows Origin to crystalise some of the significant value we have created in Australia Pacific LNG, while retaining upside to further value creation through a continuing substantial shareholding.”
Origin’s guidance for cash flow from Australia Pacific LNG for the 2022 financial year is unchanged at greater than $1 billion, net of Origin oil hedging.
Following EIG’s purchase of the 10 per cent stake, ConocoPhillips will hold the largest shareholding of 37.5 per cent, Origin will retain a 27.5 per cent stake, and Sinopec will hold a quarter of the Australia Pacific LNG joint venture.
Origin will retain its existing seats on the Australia Pacific LNG board. EIG will have one board seat, with voting rights matching its 10 per cent shareholding.
Origin told the market the sell down would not affect its role as an upstream operator, responsible for the exploration, development, and production activities.