Highlights

  • Origin Energy shares declined 3.37% to AUD 12.34 on 27 April 2026 following its quarterly update.
  • Integrated Gas revenue fell by $247 million quarter-on-quarter due to lower LNG prices and volumes.
  • LNG production declined to 164.5 PJ, impacted by fewer days in the quarter and natural field decline.
  • Octopus Energy EBITDA guidance revised to a range of -$70 million to +$30 million.
  • Energy Markets delivered mixed performance, with electricity volumes up but gas volumes down 32%.

Origin Energy Ltd (ASX:ORG) shares fell 3.37% to AUD 12.34 during the afternoon session on 27 April 2026, following the release of its quarterly report for the period ended 31 March 2026. Despite remaining 17.97% higher over the past year, the latest update reflected a mixed operational performance across its key business segments, with several financial metrics declining compared to the previous quarter, which appears to have weighed on investor sentiment.

Origin Energy Limited is an integrated energy company operating across gas production, electricity generation and retail energy markets, alongside its investment in Octopus Energy. The company’s operations are structured across three primary segments: Integrated Gas, Energy Markets, and Octopus Energy, each contributing to its overall earnings profile and growth strategy.

Integrated Gas Segment Impacted by Lower Prices and Volumes

Within the Integrated Gas segment, Australia Pacific LNG (APLNG) recorded production of 164.5 petajoules (PJ) during the March quarter, representing a decline compared to the prior quarter. The reduction was attributed to two fewer days in the reporting period, estimated to have impacted production by approximately 4 PJ, along with natural field decline.

Revenue for the segment decreased to $1,855 million, down by $247 million from the previous quarter. This decline primarily reflected lower realised LNG prices and reduced sales volumes. The movement in LNG prices was influenced by the appreciation of the Australian dollar against the US dollar, which affected pricing outcomes for export contracts.

The realised average LNG price for the quarter was US$9.51 per mmbtu, slightly lower than the previous quarter. Similarly, the average domestic gas price declined to A$4.30 per gigajoule, reflecting a reduction in short-term contract volumes.

In terms of financing, APLNG refinanced a portion of its project finance facilities during the quarter. This resulted in a reduced interest margin and deferred principal repayments, with deferrals of US$321 million scheduled for FY27 and US$265 million for FY28 at the 100% APLNG level.

Energy Markets Show Divergence Across Electricity and Gas

The Energy Markets segment delivered mixed outcomes during the quarter. Electricity sales volumes increased by 4% compared to the prior corresponding quarter, supported by growth in business customers, particularly within the data centre sector.

However, gas volumes declined by 32% over the same period. This decrease was largely in line with expectations and was attributed to lower trading activity and reduced gas demand for power generation.

Origin also reported progress in securing fuel supply for its generation operations, with 75% to 85% of anticipated coal consumption for the Eraring power station in FY27 now contracted or hedged. This provides a level of forward visibility for fuel costs and operational planning.

Octopus Energy Guidance Adjusted Amid External Factors

The performance outlook for Octopus Energy reflected a shift during the quarter, with Origin’s share of FY26 EBITDA now expected to range between -$70 million and +$30 million. This compares to prior guidance of $0 to $150 million.

The revised outlook was driven by several factors, including changes to the Energy Company Obligation scheme, increased gas capacity charges, and adverse weather conditions in the United Kingdom during February and March.

Despite the adjustment in guidance, Octopus Energy continued to expand its customer base. The retail business added approximately 700,000 customer accounts during the quarter through organic growth, with 240,000 additions in the UK and 460,000 in international markets.

Strategically, progress continued on the planned separation of Octopus Energy and Kraken into independent businesses, which remains on track for completion in mid-2026.

Additionally, Kraken announced a joint venture with Saudi Energy aimed at expanding licensing opportunities across the Middle East and North Africa. Saudi Energy had previously participated as a strategic partner in Kraken’s equity raise in late 2025.

CEO Commentary Highlights Market Volatility and Operational Stability

Chief Executive Officer Frank Calabria noted that global commodity markets experienced significant volatility during the quarter, influenced by geopolitical developments in the Middle East that impacted oil and LNG supply dynamics.

He indicated that changes in oil prices are expected to have a delayed effect on Australia Pacific LNG’s long-term export contracts, with impacts not anticipated to be reflected until FY27.

In the domestic market, electricity and gas supply conditions remained relatively stable, with limited direct impact from global price movements. Calabria also stated that operationally, Origin maintained reliable supply across its Integrated Gas and Energy Markets segments, with performance broadly in line with expectations.

The company also highlighted continued growth in Australia’s data centre sector, where Origin is positioning itself to support increasing energy demand through grid connectivity, renewable energy contracts and onsite energy solutions such as solar and battery systems.

Key Financial Metrics Reflect Mixed Trends

The quarterly update reflected a combination of declining and stable financial metrics. Integrated Gas production and revenue declined on a quarter-on-quarter basis, while LNG pricing also softened slightly.

At the same time, Energy Markets showed growth in electricity volumes, offset by a notable decline in gas volumes. Octopus Energy’s revised EBITDA outlook introduced further variability into the company’s earnings expectations.

These mixed outcomes across segments appear to have influenced market reaction, contributing to the decline in share price during the session.

What This Means for Investors?

Origin Energy’s latest quarterly report highlights a period of mixed performance across its core business segments. Declines in LNG production, pricing and revenue within the Integrated Gas segment, combined with a downward revision in Octopus Energy guidance, appear to have weighed on investor sentiment.

At the same time, growth in electricity demand within Energy Markets and continued customer expansion within Octopus Energy indicate ongoing activity across parts of the business.

The company’s exposure to global commodity markets, particularly LNG pricing dynamics, and regulatory changes affecting international operations remain key factors influencing performance. The timing of these impacts, particularly those linked to oil price movements, is expected to extend into future reporting periods.

Investors may continue to monitor developments across these segments, including LNG market conditions, domestic energy demand trends and progress in the Octopus Energy separation, as these factors shape the company’s near-term outlook.