Origin Energy Announces 42% Increase in Reserves
Origin Energy reports that following its annual review of reserves across its Exploration and Production (E&P) interests, Proved and Probable (2P) reserves have increased by 42% from 2,436 petajoules equivalent (PJe) to 3,471 PJe. This includes a net increase in Coal Seam Gas (CSG) reserves of 80% or 1,095 PJe to 2,470 PJe.
Commenting on the 2P reserves increase, Managing Director Mr. Grant King said, "It is particularly pleasing for Origin that we are able to both add significant reserves and monetize them through the signing of contracts with major customers and through commitments to service our retail and power generation requirements.
"Origin has pioneered the development of CSG in Queensland over the last decade, and we are now adding reserves for less than 10 cents per gigajoule. Our long history and technical expertise in this area allows us to exploit the full potential of the incremental and flexible nature of CSG developments.
Mr. King added: "Origin's 2P reserves represent nearly 40 times current production levels. Our integrated strategy provides us the choice of accelerating production to help satisfy demand from our retail business, our wholesale contracts and our merchant generation business. On this basis, we have the ability to monetize our gas reserves over the next 12 to 15 years and we have the incentive to continue adding to our reserves base.
"Our technical expertise and our ability to aggregate markets for our reserves additions make CSG a cornerstone of our integrated strategy and fundamental to the future growth of the Company."
The reserves increase has been achieved mainly through the additions in Origin's CSG tenements in the Bowen Basin (Spring Gully and Fairview fields) and the Undulla Nose area of the Walloon coal measures in the Surat Basin (predominantly the Talinga, Argyle and Kenya fields). While these 2P reserves now stand at 2,470 PJ, Origin's assessment of 3P reserves (Proved, Probable and Possible) in these fields amounts to 4,578 PJ.
This does not include any assessment of reserves in exploration acreage outside these major productive trends.
The depth of Origin's resource position is also reflected in the fact that the 2P reserves increase has been achieved without inclusion of resources in discoveries such as Trefoil in the Bass Basin, or Halladale and Blackwatch in the offshore Otway Basin. Technical evaluation of these discoveries is continuing.
Production and Sales
Mr. King commented "We are also today reporting record production and sales revenue for our E&P business, in our final Quarterly Production Report for the financial year ended June 30, 2007.
"Sales revenue for the year increased 14% from the prior year to $475 million. Total production of 87.2 PJe and total sales volumes of 92.5 PJe were also records, increasing by 12% and 10% respectively. This strong performance was driven by increased CSG production and the first significant contribution from the liquids rich BassGas project, which more than offset lower production from mature assets in the Cooper, onshore Otway and Perth basins.
"We are also pleased to advise that commissioning of the Otway Gas Project has commenced with the successful introduction of gas from the Victorian grid into the onshore plant. First gas sales are expected by the end of August. In addition the Operator has been granted a full 5-year unconditional License to Operate a Major Hazard Facility by the Victorian Workcover Authority, which completes the approvals required from designated authorities for the project.
"Origin is looking forward to the continued growth of the E&P business and to the on-going realization of the value inherent in our substantial resource position."
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