Deal Insight

Beach buys Origin's conventional business for US$1.25 bn

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17 October 2017

Beach buys Origin's conventional business for US$1.25 bn

Report summary

Australia's Beach Energy is buying Origin Energy's subsidiary, Lattice Energy, for A$1,585 million (US$1,250 million). It is Beach's largest acquisition to date, and will be transformational for the company. It will increase Beach's production by over 150%, and Beach's gas production will jump from 45% to 66% of output. As part of the deal, 80% of Lattice's current gas production has been contracted back to Origin Energy at fixed prices, giving a firm foundation to Beach's future cashflows. The deal will be positive for the eastern Australian gas market. Beach is a domestic-focused player, and without LNG to distract it, we expect to see increased investment in exploration, development and production in these assets. Although Lattice has a declining production profile, we see this investment leading to additional gas becoming available from the Otway and Cooper basins. This should help to meet some of the expected domestic gas supply shortfall Wood Mackenzie has identified post-2020.

Table of contents

  • Executive summary
  • Transaction details
  • Upstream assets
  • Deal analysis
  • Upsides and risks
  • Strategic rationale
  • Oil & gas pricing and assumptions

Tables and charts

This report includes 7 images and tables including:

  • Executive summary: Table 1
  • Upstream assets: Table 1
  • Deal analysis: Table 1
  • Deal analysis: Table 2
  • Deal analysis: Table 3
  • Oil & gas pricing and assumptions: Table 1
  • Oil & gas pricing and assumptions: Table 2

What's included

This report contains:

  • Document

    Beach buys Origin's conventional business for US$1.25 bn

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