By Mike Cherney
SYDNEY--Australian energy producer Origin Energy Ltd. (>> Origin Energy Ltd) said it would sell its conventional upstream oil and gas business, called Lattice Energy, to Beach Energy Ltd. (>> Beach Energy Ltd) for 1.585 billion Australian dollars (US$1.24 billion).
Origin, which previously said it planned to sell the unit, will use proceeds from the sale to pay down debt. The deal takes effect from July 1, 2017, but is subject to customary conditions.
Origin said that as part of the deal, the company secured access to a significant portion of Lattice Energy's future east coast gas production through long-term gas supply agreements.
Lattice's portfolio includes Origin's stakes in an oil-and-gas venture in the Cooper Basin in South Australia, gas operations in Western Australia, Victoria and New South Wales states and exploration projects in New Zealand.
The exit leaves Origin focused on power-generation assets and retail businesses in eastern Australia, as well as its stake in the APLNG project and the coal-seam gas operations that feed it. APLNG is one of three LNG operations on the coast of Queensland that have positioned Australia to overtake Qatar as the world's biggest exporter of the fuel, possibly as early as 2019. The plant counts ConocoPhillips (>> ConocoPhillips) and China Petrochemical Corp. as partners.
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