Big energy boost with $1.6b deal

AN energy company backed by media mogul Kerry Stokes has agreed to pay almost $1.6 billion for Origin Energy’s conventional oil and gas exploration business.

In a move that will double its market value, Beach Energy is buying Origin’s Lattice Energy division for $1.585 billion.

The deal will also triple Beach’s oil and gas reserves to 232 million barrels of oil equivalent, and production this financial year is now expected to more than double to between 25 million and 27 million barrels.

Beach chief Matt Kay said the “transformational” deal would deliver a diverse asset portfolio and provide material value growth for shareholders.

“It establishes Beach as a major supplier of gas to domestic markets, and provides a step-change in production, operating capabilities and geographic exposure,” he said in a statement to the stockmarket.

The biggest shareholder in Adelaide-based Beach is Seven Group, the industrial and media investment company controlled by Mr Stokes.

Seven Group is a major investor in Network Seven owner Seven West Media.

Beach had been rumoured to be a suitor for the Origin assets since the energy production and retailing titan hived them into the Lattice business last December.

The deal covers oil and gas projects in the Otway, Cooper, Bass and Bonaparte basins, as well as an interest in the Perth Basin.