Agl Energy Limited · ASX:AGL
Agl Energy — Merger or Acquisition (July 2005)
29 slides from Agl Energy's merger presentation, Jul 5, 2005
Slide 1: PNG Gas Agreements: Creating value through a long term gas supply strategy
PNG Gas Agreements Creating value through a long term gas supply strategy Greg Martin Managing Director 5 July 2005
Slide 2: Disclaimer
Disclaimer The information in this presentation: ¾ is not an offer or recommendation to purchase or subscribe for securities in The Australian Gas Light Company or to retain any securities currently held ¾ does not take into account the potential and current individual investment objectives or the f
Slide 3: Agenda
Agenda ¾ Overview of PNG Agreements and Key Deliverables ¾ PNG Gas Agreements - Details ¾ PNG Gas Agreements - Financial Impacts ¾ Conclusion ¾ Appendices PNG Pipeline - Update Eastern Australia Supply/Demand Dynamics Integrated Energy Company Strategy 2
Slide 4: Overview of PNG Agreements & Key Deliverables
Overview of PNG Agreements & Key Deliverables
Slide 5: Overview of PNG Gas Agreements
Overview of PNG Gas Agreements AGL has today taken a significant step in executing against its strategy of being a leading integrated energy company: ¾ Executed a gas supply agreement (GSA) with the PNG Gas producers for the supply of approximately 1500 PJ of gas over 20 years commencing from 2009
Slide 6: Key Deliverables
Key Deliverables ¾ Consistent with AGL’s strategy of strengthening its position as a leading Australian integrated energy company ¾ Positions AGL to deliver long term value for shareholders by: securing long term, competitive gas supplies to support AGL’s portfolio requirements for NSW, ACT, South
Slide 7: PNG Gas Agreements - Details
SAGL PNG Gas Agreements - Details
Slide 8: Gas Supply Agreement - Details
Gas Supply Agreement - Details ¾ Supply: approximately 1,500 PJ ¾ Term: 2009-2028 ¾ Value: approximately AUS$4.5 billion ¾ Competitively priced below AGL’s existing current average portfolio cost ¾ Contract flexibility: load factors, take-or-pay levels, delivery points and annual volume ramp-up ¾ Pr
Slide 9: Upstream Investment Agreement - Details
Upstream Investment Agreement - Details ¾ Executed a UIA with Oil Search comprising two core elements: 10% stake in the PNG Gas Project currently giving AGL the third largest interest in the project after gas project operator Exxon Mobil and oil projects operator Oil Search This stake in the PNG
Slide 10: Upstream Investment Agreement - Details (cont)
Upstream Investment Agreement - Details (cont) ¾ Indicative acquisition cost of US$300m (~AUS$400m at current exchange rates) AGL’s share of total oil, gas and condensate reserves approximately 110 million barrels of oil equivalent (boe) Final acquisition price of AGL’s upstream PNG interests de
Slide 11: PNG Upstream Investment Overview
PNG Upstream Investment Overview 2P Gas Resources PRL 2 3rd Party Certified * Hides 4,520 PJ PDL 1 PRL 11 Juha 1,240 PJ JUHA Angore 1,370 PJ Kutubu 1,540 PJ ANGORE PRL 2 PRL 12 Moran 280 PJ HIDES SE Hedinia 200 PJ PRL 12 Gobe 240 PJ Total 9,390 PJ PDL 5 PDL2 Kutubu Project MORAN PDL2 KUTUBU SE HEDIN
Slide 12: PNG Gas Agreements - Financial Impacts
PNG Gas Agreements - Financial Impacts
Slide 13: Financial Impacts
1 Financial Impacts ¾ EPS accretive from day one: ~ 5cps on an annualised basis first year ¾ Positive cashflow after interest, tax and capex from day one ¾ Acquisition expected to be 100% debt funded: approximately US$300m (~AUS$400m at current exchange rates) drawn from existing facilities ap
Slide 14: Financial Impacts
1 Financial Impacts ¾ Gas project capex requirements being defined by upstream FEED process ¾ AGL capex requirement for gas project: ~US$30-40m pa for initial 4 years from financial close, minimal thereafter ¾ Tax: Oil reserves: 50% tax rate - applicable from financial close Gas project reserves
Slide 15: Conclusions
Conclusions ¾ PNG Gas agreements are consistent with AGL’s integrated energy company strategy by delivering: competitively priced, flexible wholesale gas supplies equity investment in upstream PNG project at attractive entry price greater certainty around PNG pipeline proceeding 14
Slide 16: Further Information / Contacts
Further Information / Contacts A full range of information on AGL including annual reports, presentations and financial results is available from our website www.agl.com.au alternatively, contact Graeme Thompson Head of Investor Relations The Australian Gas Light Company phone: +61 2 9921 2789 mobil
Slide 17: Appendices
SAGL Appendices
Slide 18: PNG Pipeline - Update
SAGL PNG Pipeline - Update
Slide 19: PNG Pipeline - Update
PNG Pipeline - Update Kutubu Gobe PAPUA - Kopi NEW GUINEA ¾ FEED: engineering, environmental and land access processes Port underway on east coast route to Torres Strait Moresby Gladstone (1890km) Bamaga Cape York Gove Commercial and technical AGL/Petronas PNG - Qld Gas Pipeline ¾ Weipa Potential La
Slide 20: Eastern Australia Supply/Demand Dynamics
Eastern Australia Supply/Demand Dynamics
Slide 21: Gas Resources - West v East - Independent Markets
Gas Resources¹ - West v East - Independent Markets PNG 10,000 PJ Bonaparte 26,000 PJ Browse 28,000 PJ Carnarvon 86,000 PJ Cooper 2,500 PJ 50% plus exported Coal Bed Methane Estimated remaining reserves and resources as at 1 Jan 2003. Source: Geoscience Australia 2004 ¹ Resources include both Categor
Slide 22: Eastern Australia - Divergent Supply Demand Dynamics
Eastern Australia - Divergent Supply Demand Dynamics ¾ Increasing reserves uncertainty from 2012 onward 20,000 Increasing reserves uncertainty (PJ) 10,000 0 2005 2010 2015 2020 2024 Discovered Reserves Cover Cumulative Demand Source: Wood Mackenzie 21
Slide 23: Eastern Australia - Supply Demand Implications
Eastern Australia - Supply Demand Implications ¾ Wood Mackenzie analysis suggests even with PNG, CBM & Yet-To- Find (YTF) gas a clear need for new sources of gas supply to meet demand arises from 2015 Eastern Australia - Supply & Demand Base Case 1200 1000 800 (PJ) 600 400 200 0 2003-04 2006-07 2009
Slide 24: Eastern Australia Energy Consumption
Eastern Australia Energy Consumption 7000 6000 Substantial growth for Gas Wind 5000 Solar Hydro 4000 Biogas PJ Biomass 3000 Natural gas 2000 Oil Coal 1000 0 2001-2002 2004-05 2009-10 2014-15 2019-20 Source: ABARE 2004 – “ Australian Energy: National and State Projections to 2019-20” 23
Slide 25: Queensland Gas Demand Forecast
Queensland Gas Demand Forecast ¾ Queensland a key market for PNG Gas / AGL ¾ ACIL Tasman forecast Queensland demand will continue climbing on the back of existing rapid growth ¾ Estimated growth of approximately 5% p.a. over next 20 years 240 Largely supplied by PNG Gas / CSM 160 PJ pa Existing Cont
Slide 26: Integrated Energy Company Strategy
Integrated Energy Company Strategy
Slide 27: Integrated Energy Company Strategy
Integrated Energy Company Strategy OBJECTIVE: Pursue targeted upstream gas and power generation opportunities to strengthen our position as a leading Australian energy company and develop a integrated energy business OUTCOME: ¾ Build a long term, competitive and highly complementary gas portfolio wi
Slide 28: Integrating Across the Energy Value Chain
Integrating Across the Energy Value Chain Generation/ Transmission Distribution Retail Production NSW, Vic, SA NSW, Vic, SA Vic Electricity WA, QLD QLD, WA PNG PNG Pipeline NSW, Vic, SA Natural Gas NSW and LPG QLD, NSW, SA, VIC, WA QLD, WA Operations Agility Renewable Energy APT Energy Investments L
Slide 29: Integrated Energy Company Strategy - Upstream Gas
Integrated Energy Company Strategy - Upstream Gas Objectives Outcome 1 Source competitively priced gas to meet 9 Reduced average price of wholesale gas needs of current and future customers portfolio 9 Provides additional security of supply (particularly for large load customers) 2 Reduce portfolio