Origin Energy (ASX:ORG) - CEO and Managing Director, Frank Calabria
CEO and Managing Director, Frank Calabria
Source: Origin Enegry
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  • Origin Energy (ORG) announces a $250 million share buyback to begin in April as it takes steps towards a transition to a net-zero business by 2050
  • The company says a strong balance sheet has given it the opportunity to invest in the growth opportunities associated with the decarbonisation of the energy industry
  • Origin CEO Frank Calabria says the company’s outlook is “robust”, with ORG’s capital structure comfortably within its target range
  • Alongside an increase in battery storage, Origin says plans to support domestic hydrogen supply from the mid-2020s and export supply from late 2020s
  • Shares in Origin Energy are trading higher following this morning’s news, up 1.21 per cent to $5.85 each at 12:15 pm AEDT

Oil and gas giant Origin Energy (ORG) has announced a $250 million share buyback to begin in April as it takes steps towards a transition to a net-zero business by 2050.

The ASX 200-lister said in an investor presentation a strong balance sheet had provided the choice and flexibility to make the “right decisions” over time while investing for growth.

Ahead of the presentation, Origin CEO Frank Calabria said the company’s outlook was “robust”, with ORG’s capital structure comfortably within its target range.

“This means we are now in a position to increase shareholder distributions with a share buyback of $250 million,” Mr Calabria said.

“Going forward, we will continue to balance expected increased cash flow available for shareholder distributions with growth investments.”

He flagged further “capital management initiatives” to be considered by the company over time, meaning more buybacks could be on the cards for Origin as it shifts focus to its decarbonisation strategy.

Origin said tailwinds in the energy industry as the world pursues net-zero emissions had created significant growth opportunities for the company.

For example, Origin predicted roughly US$120 trillion (A$165 trillion) worth of global investment into net-zero emissions of which it could take advantage.

Further, the company forecast an eightfold increase in storage on the Australian National Electricity Market (NEM) by 2030 alongside a 15 per cent increase in local electricity demand by this time.

For Origin, the company’s future strategy includes chasing a net cash cost reduction of between $200 million and $250 million from a 2018 financial year baseline through to the 2024 financial year.

Meanwhile, alongside an increase in electrical vehicles under management and in battery storage, Origin today said it planned to support domestic green hydrogen supply from the mid-2020s and export supply from late 2020s.

Origin predicts the hydrogen market to grow by 500 per cent by 2050.

Shares in Origin Energy were trading higher following this morning’s news, up 1.21 per cent to $5.85 each at 12:15 pm AEDT. The compnay has a $10.3 billion market cap.

ORG by the numbers
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