Origin Chairman, Mr Gordon Cairns said, 'While acknowledging both a statutory loss and a reduction in underlying profit, Origin has made significant progress in the past year to build resilience to lower oil prices through asset sales, cost reduction, improving cash flow and the equity raising. These actions have resulted in a significant reduction in debt and the Company is well placed to exceed its target to reduce debt to below $9 billion by end FY2017.

'At an operational level, Origin has performed well. The Energy Markets business has significantly increased cash from operating and investing activities and improved operational outcomes across many key indicators of performance.

'Our Integrated Gas business has achieved a very important milestone with the commencement of LNG production from APLNG's first train.

'We expect Train 2 to commence production in Q2 FY2017. This transition from development through to production in FY2016 and FY2017 will see the Company benefit significantly from its investment in APLNG through earnings and returns from FY2018 and beyond.

'Given the important task of continued debt reduction, and the fact that in the current lower oil price environment the Company is not generating franking credits sufficient to frank any dividends, the Board has determined to not pay a dividend in respect of earnings for the second half of the financial year. While the Board will review each dividend decision in light of the prevailing circumstances, the Board's view is that suspension of the dividend is in the best overall interest of shareholders,' said Mr Cairns.

Origin Managing Director, Mr Grant King said, 'Underlying EBITDA from continuing operations of $1.6 billion was in line with the prior year.

'A strong operational performance from Energy Markets resulted in an increased contribution of $70 million to $1.3 billion. Gross profit contributions from the Natural Gas and Electricity businesses were preserved in a market that has changed significantly in the past year while costs were reduced. Importantly, net cash from operating and investing activities increased by $522 million to $1.3 billion.

'A major milestone was the commencement of LNG sales by APLNG in January 2016. Production has ramped up quickly to above design nameplate capacity and to date, APLNG has shipped 36 cargoes, primarily to its two major customers, Sinopec and Kansai.

'The maiden EBITDA contribution from the commencement of LNG production by APLNG has in part offset the impact of lower oil prices on the Integrated Gas business which decreased by $112 million to $386 million. As the investment in APLNG nears completion and cash flows from production reduced Origin's required contribution to APLNG, cash flow after operating and investing activities has improved by $1.4 billion to ($1.6) billion.

'In association with the commencement of LNG production, Origin brings to account its share of APLNG's Interest, Tax, Depreciation and Amortisation (ITDA). This has increased ITDA in Origin's accounts from $62 million to $296 million and includes a disproportionate share of costs associated with infrastructure assets. The increase in revenue at current low oil prices did not fully offset the increase in ITDA and is the main driver of the decline in Underlying Profit from continuing operations of $249 million to $354 million,' said Mr King.

The Company released its Annual Reserves Report on 29 July, 2016. Including production, Origin's proved plus probable (2P) reserves increased by 17 PJe to a total of 6,277 PJe, when compared to the prior year. The key changes in 2P reserves include 249 PJe net increase resulting from revisions and extensions with notable increases in the Perth Basin (Waitsia/Senecio field) and offshore NZ (Kupe field), partly offset by decreases in Cooper, Otway and Bass basins, and a 231 PJe decrease due to production.

Mr King said, 'In building resilience to a lower oil price environment, Origin has made good progress on asset sales and cost reduction.

'During the past year, asset sales totaling $484 million have been announced, in addition to the sale of Origin's interest in Contact Energy ($1.6 billion). The sale of additional assets is on track to meet our target of $800 million by the end of FY2017.

'In the 18 months to the end of FY2016, we have reduced our workforce by 28 per cent, or 2,500 people, as capital projects have been completed or stopped and operating costs reduced. This will support a continued reduction in cash costs into FY2017.

'We have also taken action to reduce exposure to low oil prices through the purchase of put options over 15 million barrels of oil for FY2017 at prices of US$40 per barrel and A$55 per barrel.

'The 2016 financial year has seen some major changes in the global energy industry with lower oil prices, new LNG projects coming into production and the adoption of carbon reduction targets on a global basis.

'The energy resources that will benefit most from these trends are natural gas and renewables. Origin's strategy of investing in gas and renewables sees the Company well placed to lead this transition in local markets through its Energy Markets business and in regional markets through its investment in APLNG and its growing LNG production,' Mr King said.