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Oct 20 (Reuters) - Australian power retailer and gas producer Origin Energy ORG.AX said on Wednesday high commodity prices were expected to offset a decline in earnings at its energy markets business.
Oil and natural gas prices have soared globally as activity recovers from the lulls of the pandemic, leading to disruptions in energy-intensive sectors and spiking energy prices for consumers.
The comments by Origin at an annual general meeting came months after it flagged a steep fall in fiscal 2022 earnings for its energy markets business, which is struggling from a collapse in wholesale electricity prices.
It, however, said with oil prices at more than $80 a barrel, far higher than the number it based its guidance in August on, it was expecting to reap the benefits from the rising prices. O/R
Origin said fiscal 2022 break-even costs were expected between $20-$25 a barrel, while it anticipated cash flows of more than A$1 billion after hedging from Australian Pacific LNG (APLNG).
"With the oil price sitting materially higher than the U.S.$68/bbl that we based our guidance on, we are today reiterating the upside to a higher oil price," Managing Director Frank Calabria said in a speech.
The company left its fiscal 2022 energy markets business core earnings forecast unchanged between A$450 million and A$600 million.
The Sydney-based company said a decline in earnings from its energy markets division was expected to be largely offset by a strong performance of its APLNG business.
APLNG is one of the largest producers of natural gas in eastern Australia and is a joint venture between Origin, ConocoPhillips COP.N and Sinopec 600028.SS.
(Reporting by Harish Sridharan in Bengaluru, additional reporting by Nikhil Kurian Nainan; Editing by Subhranshu Sahu)
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