First of all, let's isolate the important information. The first sentence is irrelevant to the problem, so don't let that number get into your head.
What we do know is that he ended up with 1 orange at the end of this transaction, and he gave half and half of that half. All in all, the original amount of oranges he had got divided by 1/4, because 1/2 x 1/2 is equal to 1/4. When we reverse 1/4, we get 4. To find out how many oranges Peter started it, we must multiply the number of oranges he has now by 4. We know he has 1 orange now, so 
Peter originally had 4 oranges.
Hope this helps! :)