Origin Energy has flagged a $533 million hit to its first-half results from impairment charges for its Ironbark gas field and its recently sold Lattice Energy business.
The electricity and gas company says it expects a $360 million impairment on the Queensland Ironbark gas field, post-tax, after a downgrade in its reserves and a revised development plan.
“The reserves revision follows a detailed assessment of the Ironbark gas field applying updated assumptions consistent with the technical review of Australia Pacific Liquefied Natural Gas’ reserves carried out in June 2017,” Origin said in a statement.
The carrying value of the Ironbark gas field development after the impairment is expected to be $279 million.
Origin also expects a non-cash post-tax impairment of $173 million for Lattice Energy, its operations in Otway, Victoria, after recognising the conventional oil and gas business’ earnings from July to January.
The advice comes after Origin Energy last week announced it had completed the sale of Lattice Energy to Beach Energy for $1.6 billion.
Under the deal, Origin has secured access to a significant portion of Lattice’s future east coast gas production through long-term gas supply agreements.
The impairment charges will not impact Origin Energy’s full-year underlying earnings before interest, taxes, depreciation, and amortisation, the company said.
It will release its half year results on February 15.
Origin Energy shares dropped 18 cents, or two per cent, to $8.77.