Origin expects to recognise an impairment for the Ironbark gas field of AUS$360 million on a post-tax basis, after taking into account a downgrade in Ironbark reserves and a revised development plan.
The reserves revision follows a detailed assessment of the Ironbark gas field applying updated assumptions consistent with the technical review of Australia Pacific LNG's reserves carried out in June 2017. The carrying value of the Ironbark gas field development post the impairment is expected to be AUS$279 million.
The Ironbark development is expected to enter FEED for stage 1 development in FY2018 with a revised multi-stage field development plan initially targeting the high permeability sweet spot (Undulla Nose extension) in the North West sector of the tenement. First gas is targeted in FY2021. Successful testing of low permeability drilling techniques at Australia Pacific LNG, which could be applied to Ironbark, provides the potential for development of additional resource. Origin is considering various options to bring the Ironbark gas to market and the FEED process is expected to inform an optimum path for development of the resource in the future.
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/08022018/origin-to-recognise-non-cash-impairment-charge-for-first-half-2018/