Origin Energy could restart paying dividends in just over 12 months' time.
That's the call from UBS analysts on Monday morning, who have a 10¢ a share dividend in their forecasts for the second half of next financial year.
It's all built around Origin's balance sheet and UBS says that having already raised $1 billion from asset sales and more to come, Origin's board could see net debt below three times EBITDA.
And at that time, dividends could be back in the equation.
"ORG's main priority continues to be debt reduction," the analysts told clients on Monday morning.
"At 31 December ORG had $9.1bn of net debt; the sale of the Stockyard Hill wind farm for $110m, proceeds from the Darling Downs sale and free cash flow should see net debt reduce to $8.6bn by the end of June.
"Looking further ahead, ORG says the planned divestment of most of its conventional oil and gas assets (called Lattice Energy) is on track to be completed in calendar 2017.
"In FY18 we forecast overall free cash flow for ORG to be ~A$1.2bn."
The analysts reckon that means Origin could have just over $8.5 billion debt at June 30, which would drop to less than $7.5 billion at the end of the 2018 financial year. And that number does not take into account Lattice, which is currently up for sale.
