Here’s why the Origin share price is storming higher today

The Origin Energy Ltd (ASX: ORG) share price is starting the week in fine form.

In afternoon trade, the energy company’s shares are up 3% to $5.58.

Why is the Origin share price pushing higher?

Investors have been buying Origin’s shares today after the company released its quarterly update.

According to the release, Australia Pacific LNG revenue for the first quarter came in at $2,768 million. This is an increase of 1% on the prior quarter and a massive 64% on the prior corresponding period.

This was driven by higher realised oil prices, which helped offset a 2% quarter on quarter decline in production to 167.5 PJ due to wet weather impacting access to wells.

Looking ahead, management notes that the outlook for the LNG trading business has improved. This is particularly the case for FY 2025, where hedging at favourable market prices has resulted in an expected LNG trading EBITDA of $350 million to $550 million. Though, this outlook remains subject to market prices on unhedged volumes, operational performance, and delivery risk of physical cargoes, shipping, and regasification costs.

Energy markets

The release also notes that electricity and gas spot prices reduced when compared with the June quarter but remain considerably higher than a year ago. This is due to higher international coal and gas prices.

Total electricity sales volumes rose 8% year on year during the first quarter. While retail sales volumes fell by 2% due to the continued increase in solar uptake and energy efficiency, business volumes gained 18% on new customer wins.

‘Market conditions have improved’

Origin’s CEO, Frank Calabria, appeared to be pleased with the quarter and the improvement in market conditions. He said:

Market conditions have improved following the incredibly challenging June quarter during which we experienced significant power supply challenges and elevated wholesale prices across the NEM. Australia Pacific LNG delivered a very solid $2,768 million in revenue for the quarter, relatively steady on the June quarter but up 64 per cent on the prior year, due to higher realised oil prices. This quarterly performance was particularly strong given the impact of wet weather and planned downstream maintenance.

In Energy Markets, net new business customer wins drove electricity sales volume growth, offsetting weaker retail sales volumes due to improvements in energy efficiency and an increase in solar uptake.

In line with our strategy, we continued to invest in renewable and cleaner energy and customer solutions during the quarter with a $163 million (£94 million) investment to maintain our 20 per cent stake in the leading UK energy and technology company, Octopus Energy, and $6 million for the acquisition of the 60 MW Yanco Solar Farm development in the NSW Riverina.

The post Here’s why the Origin share price is storming higher today appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro 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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