What might Origin’s latest move mean for the future of ASX 200 energy shares?

The decision of Origin Energy Ltd (ASX: ORG) to withdraw from the Beetaloo Basin sparked shockwaves last week.

The energy giant’s move comes after it announced it will sell its exploration interests in the region for $60 million.

Tamboran Resources Ltd (ASX: TBN), along with its largest shareholder Bryan Sheffield, will take over Origin’s 77.5% interest in three permits in the Northern Territory region. Tamboran will also receive a 5.5% royalty based on wellhead revenues from the permits.

Why Origin decided to abruptly make the decision is not fully understood. However, the company made it clear the capital-intensive nature of the project means it is “better placed prioritising capital towards other opportunities that are aligned to [its] refreshed strategy”.

Origin expects to make a $70-$90 million loss on the deal.

What’s the decision mean for ASX 200 energy shares?

Whilst it’s difficult to draw a direct correlation between Origin’s decision and the share prices of other ASX 200 energy players, it wasn’t a pretty time for the sector last week.

Many of the dominant names incurred a period of downside. However, it’s worth noting here the price of natural gas has also taken a nosedive in the past two weeks.

US Natural gas futures trade 24% down at US$6.89/MMBtu from their previous high on 14 September, whereas both UK and European gas contracts are down in similar fashion.

Coal has also been trading sideways for the past two weeks as governments around the world look to hedge their exposure to soaring energy prices.

Despite last week’s announcement, Origin will keep a direct interest in the Beetaloo Basin, with the company still set to receive up to 36.5 petajoules of natural gas per annum from the site if it’s successfully developed.

Origin’s exit is unlikely to have a large impact on well-established energy giants such as AGL Ltd (ASX: AGL), Santos Ltd (ASX: STO), and Woodside Energy Group Ltd (ASX: WDS).

Each of these giants has its own respective capital investments at various sites around the world and is not limited to just one or two projects.

In addition, they all have diversified exposure to the industry.

Nevertheless, it will be a matter of time to see if there is any major fallout from Origin’s decision to pursue greener opportunities.

Origin shares remain up more than 18% over the past 12 months of trade. The returns for all shares mentioned are seen on the chart below.

The post What might Origin’s latest move mean for the future of ASX 200 energy shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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