Lattice Energy was Origin’s upstream oil and gas business, with the acquisition transformational for Beach as it will significantly enhance its scale and create a leading ASX-listed oil and gas company with a diversity of production and growth options.
“It establishes Beach as a major supplier of gas to domestic markets, and provides a step-change in production, operating capabilities and geographic exposure,”? said Beach CEO Matt Kay.
“It also provides attractive long-term gas contracts with Origin Energy and other high quality counterparties which underpin returns, cash flow generation and a rapidly developing profile.”?
As part of the sale, Origin has secured access to a significant portion of Lattice’s future east coast gas production under long-term gas supply agreements.
“In signing these agreements today, we have delivered on our commitment to divest Lattice consistent with our plan to simplify the Origin business, reduce debt and improve returns to shareholders,”? said Origin CEO Frank Calabria.
“Importantly, Origin retains access to future Lattice east coast gas production and LPG, to help us continue to meet energy needs of our domestic customers.”?
Lattice is a complementary portfolio of assets with diversified exposure to the Australian east coast, west coast and New Zealand gas markets with a mix of production and exploration assets.
The combination significantly expands Beach’s footprint across multiple basins, production hubs and jurisdictions, increasing Beach’s 2P reserves by 200 per cent to 232 MMboe and FY18 production guidance by 150 per cent to 25-27 MMboe.
Completion of the deal is subject to satisfaction of customary conditions, including approvals for the New Zealand Minister of Energy and Resources and the New Zealand Overseas Investment Office.
The transaction will have an effective date of 1 July 2017.