On Sept. 9, Origin Energy Ltd., Australia's top power and gas retailer, promoted the head of its energy markets in order to replace long-time CEO Grant King, and said it would focus on cutting debt before deciding whether to spin off its gas production business.

Chairman Gordon Cairns said it made sense to hand the reins now to Frank Calabria because the company had made good progress in reducing debt and because its AU$25 billion (US$19 billion) Australia Pacific LNG project (APLNG) would be complete in a few months.

"This is not a precursor to a de-merger," Cairns told Reuters. "You can't de-merge when you have AU$9 billion in debt."

King has long been a market darling, having led Origin since it peeled off from Boral Ltd. in 2000 and having headed the energy arm of Boral for six years before that. Calabria will take over for King beginning Oct. 19.

Calabria comes into the top job just as Origin is recovering from a drop in its share price to a 12-year low in January. Sentiment soured in 2015 as the company was hit by a slump in oil prices just as its debt soared while building APLNG.

It was forced to raise AU$2.5 billion in a share sale last September to help cut net debt to AU$9.1 billion. It also put several assets up for sale to raise AU$800 million by June 2017.

"The company's focus in the short term remains on accelerating debt reduction and improving returns. This will lead to the opportunity for further strategic and structural choices," Cairns said.

Analysts said Origin would need to reduce debt by a further AU$4 billion and clear project finance hurdles tied to APLNG before it could spin off the project.

"I think the trajectory they're on, and where the oil price is, puts them at a point where in 12 to 18 months they will be able to make that choice," said an analyst with a fund manager, who declined to be named due to the sensitivity of the issue.

Calabria, popular within the company, joined Origin in 2001 as CFO and moved across to head the energy markets business in 2009. He said pushing into renewable energy was a "key opportunity for us."

Origin's shares jumped nearly 6% in a weaker market on Sept. 9 following the CEO announcement.

(US$1 = 1.3067 Australian dollars)