Origin Energy on Friday forecast lower production from the Australia Pacific LNG (APLNG) project in fiscal 2027, even as fourth-quarter revenue from its stake in the venture rose three per cent sequentially on stronger sales volumes.
Revenue from APLNG, the Australian power producer's joint venture with ConocoPhillips and Sinopec, increased to AU$497 million ($349.29 million) in the three months ended June 30 from AU$481 million in the March quarter.
Its production share was broadly flat, while total sales rose four per cent. It realised $9.93 per million British thermal units, up from $9.51 in the third quarter.
APLNG is the largest producer of natural gas in eastern Australia and Origin has a 27.5 per cent stake in it.
Liquefied natural gas prices were volatile as the Iran war disrupted supplies and shipping through the key Strait of Hormuz, but the benefits have had a lagged effect on Origin due to its long-term export contracts.
"Given the lag in Australia Pacific LNG's long-term LNG export contracts, the higher oil prices since February are expected to be reflected in FY27," Origin CEO Frank Calabria said.
For fiscal 2026, APLNG produced 668 petajoules (PJ), but Origin expects output to decline to 625 PJ to 670 PJ in 2027, mainly because older gas fields are declining naturally.
Capital and operating expenditure is expected to increase to AU$3.0 billion-AU$3.3 billion as drilling activity ramps up.
The company said the additional spending was meant to support future production and that new drilling typically takes about two years to reach peak output.
Origin's results come as Australia tries to keep more gas on the east coast domestic market to avoid supply shortfalls and ease energy bills.
Shares of the company rose as much as 1.9 per cent to AU$10.860, hitting their highest level since July 2.
(Reporting by Roshan Thomas and Nikita Maria Jino in Bengaluru; Editing by Shilpi Majumdar and Subhranshu Sahu)
