Review of gas assets and exit of gas exploration and production

AGL has today announced that following a review, it has taken a strategic decision that exploration and production of natural gas assets will no longer be a core business for the company due to the volatility of commodity prices and long development lead times.
There is no change to AGL’s commercial or retail gas activities. AGL is confident that it has sufficient gas for its residential and small business customers following the recent contract with the Gippsland Basin Joint Venture and the planned expansion of the Eastern Gas Pipeline. Incremental future gas requirements are likely to be sourced from the southern markets.

AGL expects to recognise an impairment charge of $640 million after tax ($795 million pre-tax) against the carrying value of its gas exploration and production assets including an increase in rehabilitation provisions. This charge will be recognised as a significant item in the financial results for the six months ended 31 December 2015. The impairment has minimal impact on FY16 Underlying profit.

In New South Wales, AGL will not proceed with the Gloucester Gas Project and will cease production at the Camden Gas Project in South West Sydney in 2023, twelve years earlier than previously proposed.

Click here to read AGL’s ASX release.

One Response

  1. Peter Epov

    To the Directors and CEO of AGL, I wish to extend to you on behalf of the members and directors of the Manning Alliance Inc and the people that we represent throughout the Manning Valley Community, our sincerest congratulations at arriving at this critically import and sound business decision. AGL has had a very proud history spanning over 150 years as an honourable iconic Australian company that has built a solid reputation on reliability and trustworthiness . This decision is most welcome and one that re-establishes your reputation and credibility as a responsible leader in Australia’s energy future. We welcome the fact that you will relinquish your exploration licence in Gloucester and we hope that you may support efforts for that licence not to be re-issued. Peter Epov, Chairman.

    Reply

Leave a Reply

  • (will not be published)