Origin Energy delivered a strong financial year to 30 June 2026, with its Australia Pacific LNG operations producing 668 PJ and generating fully franked dividends of $911 million, both at or above guidance. This performance comes as the company faces a more challenging outlook, with FY27 production expected to decline to 625 to 670 PJ due to natural field decline, prompting a substantial increase in capital expenditure to $3.0 to $3.3 billion.
The June quarter showed stable production of 165 PJ but revenue increased 6 percent to $1,964 million, benefiting from increased LNG spot volumes and prices alongside higher domestic short-term volumes. CEO Frank Calabria’s commentary points to broader market dynamics, with the Middle East conflict continuing to impact oil and LNG markets. The company notes that higher oil prices since February should flow through to FY27 earnings given the lag in Australia Pacific LNG’s long-term export contracts, potentially offsetting some of the impact from production decline.
The increased capital expenditure reflects Origin’s strategy to invest in additional drilling activity designed to deliver incremental production benefits in future years. Management noted that the typical lead time to peak production is approximately two years, suggesting that today’s investment decisions will support earnings growth through 2027 and beyond. This positions the company to navigate the natural field decline while maintaining its role as a domestic gas supplier and export participant.
Beyond liquefied natural gas, Origin’s energy markets division expanded its customer base by 243,000 accounts during the financial year and now operates 980 MW of battery storage capacity with 3,408 MWh available. FY26 EBITDA in this segment is expected to exceed the midpoint of $1,550 to $1,750 million guidance. However, the segment was overshadowed by disclosure of a data security incident affecting approximately 900,000 customers, discovered during a recent review. The company is supporting affected customers while the matter remains subject to criminal investigation.
Origin’s Octopus Energy operations completed the separation of Kraken with a $1 billion equity raise in July 2026. The group added 343,000 customer accounts in the June quarter alone, with Octopus growing organic accounts by 2.2 million during the full year. The UK retail business is expected to report its fourth consecutive year of profitability, while the broader group’s virtual power plant network expanded to 3.2 GW across 482,000 devices, up 63 percent year on year. For investors, the key watch points are whether the increased drilling investment successfully offsets production decline, how customer acquisition momentum translates into profitability for Octopus Energy, and the ultimate impact and cost of the data security incident. This announcement is price sensitive and has been flagged as material by the ASX.
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About Origin Energy Ltd (ASX: ORG)
Origin Energy is a major integrated energy company operating across Australia’s electricity and natural gas markets. It generates electricity from multiple sources including coal, natural gas, hydro, and solar, while retailing electricity and natural gas to approximately 4.2 million customers. The company also engages in natural gas exploration and production and offers complementary services including solar systems, EV charging, and broadband.
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