ENERGY INDUSTRIES – AUSTRALIA

Analysts cool on Origin’s petroleum plan

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 15 : 8-Dec-16

Ben Wilson of RBC Capital Markets has questioned Origin Energy’s lack of information regarding the proposal to spin off its conventional oil and gas assets. However, he notes that the partial demerger will reduce Origin’s debt and the company’s complexity, and adds that Origin could eventually also offload its stake in the Australia Pacific LNG project. Mark Samter of Credit Suisse says the demerger has merits, but he believes that Origin should have pursued a trade sale rather than an IPO.

CORPORATES
ORIGIN ENERGY LIMITED – ASX ORG, RBC CAPITAL MARKETS, CREDIT SUISSE (AUSTRALIA) LIMITED, AUSTRALIA PACIFIC LNG LIMITED, JP MORGAN AUSTRALIA LIMITED, BEACH ENERGY LIMITED – ASX BPT, CITIGROUP PTY LTD

Origin Energy spins off oil and gas business

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 15 & 20 : 7-Dec-16

Australian-listed Origin Energy has revealed plans for a partial demerger in 2017, with its conventional oil and gas assets to be held by a separately listed company. However, Origin will retain its stake in the Australia Pacific LNG project in Queensland, while it will not hold a stake in the new company. Origin CEO Frank Calabria says an IPO was deemed to offer the best value, although he adds that the group would be open to an offer that represented better value than a float. JP Morgan estimates that the assets that will be spun off are worth around $A1.8bn.

CORPORATES
ORIGIN ENERGY LIMITED – ASX ORG, AUSTRALIA PACIFIC LNG LIMITED, JP MORGAN AUSTRALIA LIMITED, SANDON CAPITAL INVESTMENTS LIMITED – ASX SNC, TATTS GROUP LIMITED – ASX TTS, ILUKA RESOURCES LIMITED – ASX ILU, MACQUARIE CAPITAL PTY LTD, UBS HOLDINGS PTY LTD, ALLAN GRAY AUSTRALIA PTY LTD, AGL ENERGY LIMITED – ASX AGL, BEACH ENERGY LIMITED – ASX BPT, STANDARD AND POOR’S FINANCIAL SERVICES LLC, MOODY’S INVESTORS SERVICE INCORPORATED

DUET investors buoyed by CKI’s $7.3b offer

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 11 & 24 : 6-Dec-16

Shares in DUET Group closed at $2.74 on 5 December 2016, after reaching an intra-day high of $A2.82. Hong Kong-based Cheung Kong Infrastructure has proposed to pay $A3 per share for the energy infrastructure group, whose assets include the Dampier-Bunbury gas pipeline in Western Australia. However, DUET has noted that the offer is unsolicited and not binding, and there is no certainty that CKI will make a formal bid. Mark Busuttil of JP Morgan says the offer represents full value and a rival bid is unlikely.

CORPORATES
DUET GROUP – ASX DUE, CHEUNG KONG INFRASTRUCTURE HOLDINGS LIMITED, JP MORGAN AUSTRALIA LIMITED, RARE INFRASTRUCTURE, ARGO INVESTMENTS LIMITED – ASX ARG, UNISUPER LIMITED, RBC CAPITAL MARKETS, 4D INFRASTRUCTURE PTY LTD, CITIGROUP PTY LTD, AUSGRID PTY LTD, STATE GRID CORPORATION OF CHINA, AUSTRALIA. DEPT OF THE TREASURY

Producers spot better returns

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Original article by Matt Chambers
The Australian – Page: 21 : 6-Dec-16

Data from EnergyQuest shows that the spot price of gas in Adelaide rose to nearly $A10 per gigajoule in the September 2016 quarter, while the spot price in Sydney and Brisbane also rose. In contrast, the LNG netback price at the Wallumbilla processing hub in Queensland fell to around $A6 per gigajoule. EnergyQuest expects LNG producers to capitalise on the rise in gas prices by redirecting more of their output to the domestic market.

CORPORATES
ENERGYQUEST PTY LTD, QUEENSLAND CURTIS LNG PTY LTD, ROYAL DUTCH SHELL PLC

Too early to say goodbye to tough times

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 20 : 2-Dec-16

AWE Limited CEO David Biggs says that oil and producers are unlikely to increase their capital investment until the longer-term impact of OPEC’s production cuts on the crude oil price is known. He believes that a sustained price above $US60 per barrel will be needed for oil companies to commit to increased spending. Beach Energy director Jim McKerlie agrees that the OPEC deal will not be a "gamechanger" for oil and gas producers.

CORPORATES
AWE LIMITED – ASX AWE, BEACH ENERGY LIMITED – ASX BPT, ORGANISATION OF PETROLEUM EXPORTING COUNTRIES, HORIZON OIL LIMITED – ASX HZN, SANTOS LIMITED – ASX STO, OIL SEARCH LIMITED – ASX OSH, ORIGIN ENERGY LIMITED – ASX ORG, WORLEYPARSONS LIMITED – ASX WOR, WOODSIDE PETROLEUM LIMITED – ASX WPL, FAR LIMITED – ASX FAR, RBC CAPITAL MARKETS

Mega-project days over: Exxon

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 15 : 1-Dec-16

ExxonMobil Australia chairman Richard Owen says the energy giant will consider options for undertaking a staged development of the Scarborough gas field. He has told a business lunch in Sydney that ExxonMobil is likely to examine ways to start delivering cash flows from new oil and gas projects at an earlier stage of their development, rather than the so-called "mega-project" approach of recent years. The Gorgon LNG has commenced shipments more than six years after construction commenced.

CORPORATES
EXXONMOBIL CORPORATION, WOODSIDE PETROLEUM LIMITED – ASX WPL, CHEVRON CORPORATION, GORGON PTY LTD

Resources rent tax will face a ‘sober’ review

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Original article by Joanna Mather, Angela Macdonald-Smith
The Australian Financial Review – Page: 3 : 1-Dec-16

Treasurer Scott Morrison has revealed plans for an inquiry into Australia’s Petroleum Resources Rent Tax. Government revenue from the tax has fallen sharply in the wake of a downturn in the crude oil price, which has made oil and gas projects less profitable. Shell Australia chairman Andrew Smith argues that revenue from the "super profits"-based tax naturally fluctuates with commodity price changes, and lower government revenue does not mean the PRRT is flawed.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, SHELL COMPANY OF AUSTRALIA LIMITED, EXXONMOBIL CORPORATION, WOODSIDE PETROLEUM LIMITED – ASX WPL, BHP BILLITON LIMITED – ASX BHP, AUSTRALIAN PETROLEUM PRODUCTION AND EXPLORATION ASSOCIATION LIMITED

Mega-project days over: Exxon

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 15 : 1-Dec-16

ExxonMobil Australia chairman Richard Owen says the energy giant will consider options for undertaking a staged development of the Scarborough gas field. He has told a business lunch in Sydney that ExxonMobil is likely to examine ways to start delivering cash flows from new oil and gas projects at an earlier stage of their development, rather than the so-called "mega-project" approach of recent years. The Gorgon LNG has commenced shipments more than six years after construction commenced.

CORPORATES
EXXONMOBIL CORPORATION, WOODSIDE PETROLEUM LIMITED – ASX WPL, CHEVRON CORPORATION, GORGON PTY LTD

Resources rent tax will face a ‘sober’ review

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Original article by Joanna Mather, Angela Macdonald-Smith
The Australian Financial Review – Page: 3 : 1-Dec-16

Treasurer Scott Morrison has revealed plans for an inquiry into Australia’s Petroleum Resources Rent Tax. Government revenue from the tax has fallen sharply in the wake of a downturn in the crude oil price, which has made oil and gas projects less profitable. Shell Australia chairman Andrew Smith argues that revenue from the "super profits"-based tax naturally fluctuates with commodity price changes, and lower government revenue does not mean the PRRT is flawed.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, SHELL COMPANY OF AUSTRALIA LIMITED, EXXONMOBIL CORPORATION, WOODSIDE PETROLEUM LIMITED – ASX WPL, BHP BILLITON LIMITED – ASX BHP, AUSTRALIAN PETROLEUM PRODUCTION AND EXPLORATION ASSOCIATION LIMITED

LNG giants face bill for underpaid royalties

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Original article by Paul Garvey
The Australian – Page: 19 & 22 : 29-Nov-16

The royalty regime for the North West Shelf LNG project is under scrutiny following a review by the Australian National Audit Office. Amongst other things, the ANAO concluded that there are deficiencies in the way royalty payments are calculated, while the project’s partners may not be entitled to all of the deductions which they have claimed. A spokeswoman for Woodside Petroleum says the company has strict compliance procedures regarding royalty payments, and any underpayment is unlikely to exceed $A11.6m.

CORPORATES
WOODSIDE PETROLEUM LIMITED – ASX WPL, NORTH WEST SHELF LNG PTY LTD, AUSTRALIAN NATIONAL AUDIT OFFICE, AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE, WESTERN AUSTRALIA. DEPT OF MINES AND PETROLEUM, BHP BILLITON LIMITED – ASX BHP, BP PLC, CHEVRON CORPORATION, ROYAL DUTCH SHELL PLC, JAPAN AUSTRALIA LNG PTY LTD, MITSUBISHI CORPORATION, MITSUI AND COMPANY LIMITED