Multi GW RE growth opportunity for Origin Energy this decade, says firm

359 MW of renewable asserts bought by RenEw power

Australian oil and gas major Origin Energy Limited (Origin) has announced it intends to undertake an initial on-market share buy-back of $250 million. The share buy-back is expected to commence in April 2022.

Origin CEO Frank Calabria said, “Origin is in a strong financial position, with a robust outlook for the business and a capital structure comfortably within our target range.

“This means we are now in a position to increase shareholder distributions with a share buy-back of $250 million.

“Going forward, we will continue to balance expected increased cash flow available for shareholder distributions with growth investments,” Mr Calabria said.

Further capital management initiatives may be considered over time, subject to operating conditions and capital allocation alternatives.

During its “Strategy Refresh 2022” presentation to investors and analysts, the company stated that it is strategically positioned to benefit from the energy transition in the following ways:

1. Energy retailing – leading customer scale and technology will create improved margins and grow value through low cost, superior customer experience and new products.

2. Energy supply – diverse portfolio and proven risk management expertise in a low carbon post Eraring world provides Origin with the opportunity to:

• Replace ‘capacity’ with batteries, Virtual Power Plant and third party contracts, complementing largest thermal peaking fleet;
• Grow ‘energy’ supply through renewables, partnering with others and using third party capital
• Gas production and wholesaling – ownership of APLNG and access to strategic gas provides strong
  cash flows
• Octopus – investment in a fast-growing global energy retailer and technology company, which has also provided us with access to the world’s leading energy technology platform
• Capital discipline – strong balance sheet, enabling choice and providing flexibility to make the right decisions over time while investing for growth

Origin further outlined its plans to accelerate renewables and cleaner energy:

Renewables:
• Multi GW renewable growth opportunity exists for Origin this decade
• Targeting a staged and disciplined investment or contracting approach
Battery:
• 460MW stage 1 (700 MW total) battery
VPP:
• Grow in-house VPP to ~2GW
Hydrogen:
• Domestic green hydrogen supply from mid 2020s and export supply from late 2020s