Shares in Origin picked up after the energy company made a statement clarifying its financing.
A short time ago, the shares were at $3.75, up more than 8% but still well below the year-high of more than $11.
“Origin is confident that its robust financing arrangements and cash flows from existing businesses position the company well to withstand a prolonged period of low oil prices,” managing director Grant King told the market in a statement.
The company has more than $6.5 billion of undrawn debt facilities and cash. It has no material refinancing requirements until 2019.
King says earnings from existing businesses have minimal exposure to oil price and provide significant headroom on debt financial covenants.
Energy companies have been cutting costs and pulling in capital expenditure as they try to catch falling oil prices.
Part of the Origin’s plans for survival in a low commodity price world is to cut 800 jobs by the 2017 financial year, reduce cash costs by $200 million and sell off $800 million of non-core assets.
Australia Pacific LNG, in which Origin has a 37.5% interest, produced its first LNG in November. The company has more than enough cash to meet its final obligations on that project – about $1.8 billion.
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