What: The share price of Origin Energy Ltd (ASX: ORG) is up over 1% in morning trade on the ASX today after the group announced the sale of its Cullerin Range Wind Farm assets.
The buyer of the 30 Megawatt wind farm assets is energy utility company DUET Group (ASX: DUE) and the sale has been struck on a multiple of 11.6 times financial year 2017 earnings before interest, tax, depreciation and amortisation (EBITDA) which equates to a price of $72 million.
So What: The sale was widely anticipated given Origin announced back in September 2015 that it planned to divest $800 million in non-core assets. Today's announcement (once completed) will bring the total proceeds from Origin's divestment program to $468 million.
Now What: Despite rallying by 23% in the past six months, the share price of Origin is still around 60% lower over the past 12 months.
While ultimately it is going to be a higher oil price which is the likely catalyst for a significant re-rating of Origin and peers such as Santos Ltd (ASX: STO), continued progress on the divestment program is likely to go some way to boosting its balance sheet and generating investor confidence in the company's future prospects.
