Apa Group · ASX:APA
Apa — Merger or Acquisition (July 2004)
37 slides from Apa's merger presentation, Jul 30, 2004
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Slide 2: Important Notice
Important Notice This presentation sets out information in relation to the proposed acquisition of the Goldfields Gas Transmission Pipeline and the Parmelia Pipeline and associated assets (“Proposed Acquisition”) by Australian Pipelines Limited as responsible entity of the Australian Pipeline Trust
Slide 3: Outline
Outline = Transaction Overview m Portfolio Impact » Goldfields Gas Transmission » Parmelia Business = Financing ® Impact 2004/2005 = DBNGP Update Australian Pipeline Trust -~
Slide 4: Acquisition Structure
| Acquisition Structure Pre Acquisition Post Acquisition = 45% 55% v 100% | Alinta 100% 88.2% 100% 88.2% 11.8% v | Parmelia _ | Parmelia i Australian Pipeline Trust -~
Slide 5: Transaction Overview
Transaction Overview Australian Pipeline Trust -~
Slide 6: Transaction Overview
"| Transaction Overview ° Acquisition by APA of CMS Energy Corp’s Australian pipeline assets: — remaining 45% interest in SCP, 88.2% owner of Goldfields Gas Transmission Pipeline (GGT) — 100% Parmelia gas business, comprising pipeline, processing, storage assets and retail Acquisition cost $206m — i
Slide 7: Strategic Rationale
Strategic Rationale APA’s strategy for growth is to: — Diversify asset risk; — Increase utilisation of our existing pipelines; — Continue to acquire minorities; and — Participate in industry rationalisation At our Full Year Results for 2003 we said “Maintaining historical growth rates requires a ste
Slide 8: Transaction Benefits
' Transaction Benefits ¢ Inline with APA’s strategy and financial criteria * Positive financial impact on APA * Progressive diversification of APA’s portfolio * Goldfields pipeline fully contracted — additional compression planned ¢ Parmelia - under-utilised asset ¢ Enhanced footprint in WA * Sound
Slide 9: Financial Impact
Financial Impact Pro forma APA interest 100% SCP and Parmelia Year ended 30 June $M 2002 2003 2004 Revenue! $95.6m $103.6m $103.1m EBITDA $69.2m $73.6m $72.2m Capex ($3.1m) ($3.2m) ($10.6m)2 Source: CMS and APA 1) Revenue includes interest 2) 2004 capex figures on an accrual basis Note: APA currentl
Slide 10: Financial Impact
) Financial Impact 2004 EBITDA multiple 8.3x on assets acquired ° — better than trading multiples for APA, comparable stocks and recent acquisitions * Strongly earnings accretive — consensus 2004 standalone NPAT: $41-43m (includes equity accounting for 55% SCP) — incremental 2004 pro forma NPAT: +$8
Slide 11: Portfolio Impact
Portfolio Impact Australian Pipeline Trust -~
Slide 12: Gas Chain
Gas Chain Exploration Production Business Development Area Perth Basin Gas Processing | \Distribution) Retail Existing Business Non Core Core Development Business Area ne Australia’s Mondarra Leading Storage Pipeline Portfolio Australian Pipeline Trust -~
Slide 13: Portfolio of Major APA Pipelines
Portfolio of Major APA Pipelines Approx. Capacity (TJ/d) Length (Km) MSP system | 2,026 MSP system Amadeus Gas RBP Pipeline Goldfields Goldfields Carpentaria RBP (fully loope Parmelia Carpentaria Amadeus Gas Parmelia Pipeline Central West Central West 1. Goldfields expandable to 164 TJ/d under full
Slide 14: Portfolio Diversification
Portfolio Diversification APA 2004 Revenues APA 2004 Revenues Pro forma pre-acquisition Pro forma post acquisition Other Parmelia Other 9g 0, 4% 7% 3% MSP 32% CGP : 12% AGT ii 0 AGT RBP ™% RBP 9% CGP 5 12% 9% 10% Note: GGT revenues shown on an equity share consolidated basis pre & post acquisition f
Slide 15: Goldfields Gas Transmission Pipeline
Goldfields Gas Transmission Pipeline Australian Pipeline Trust -~
Slide 16: APA Pipelines 2004
NORTHERN TERRITORY WESTERN AUSTRALIA APA Pipelines 2004 a~—=- APA pipelines Other pipelines
Slide 17: Goldfields Gas Transmission Pipeline map
Western NORTH WEST SHELF Broome _ Dampier | Onslow OLDFIELDS GAS Carnarvon : RANSMISSION | a IPELINE 7 Mt Magnet \_ Geraldton Kalgoorlie " p ly
Slide 18: Goldfields Gas Transmission Pipeline (GGT)
" Goldfields Gas Transmission | Pipeline (“GGT”) ; - Fully contracted — Strong counterparties to long term contracts — Serves a world leading and diversified mining region — Competitive gas supplies from North West Shelf — Capacity enhancement potential — APA gains control and management of GGT — Bu
Slide 19: GGT Asset Overview
) GGT * ASSET OVERVIEW — Pipeline built in 1996 — Total length: 1,380km — Diameter: 356mm spanning 860km 406mm spanning 520km — Transports competing gas streams from Harriet and East Spar, NW Shelf to North Eastern and Eastern Goldfields region of WA — Capacity 105 TJ/d increasing to 164 TJ/d under
Slide 20: GGT Major Customers: WMC
GGT * MAJOR CUSTOMERS — WMC: — Largest customer: MDQ 45.8 TJ/d — 4major WA nickel facilities each with a dedicated 38MW gas fired power plant — Major nickel supply agreement with China to drive capacity expansion and gas demand — Contract to 2037, volume variation in 2013 Australian Pipeline Trust -
Slide 21: GGT Major Customers: Newmont
| GGT * MAJOR CUSTOMERS — Newmont: — 24 largest customer: MDQ 20.4 TJ/d — 7.8m oz gold reserves along GGT (45% of Newmont’s Australian reserves) — 50% stake Kalgoorlie Super Pit — largest goldmine in Australia — 114MW gas power station — Reserves / production ratio 14 years Australian Pipeline Trust
Slide 22: GGT Other Major Customers
> GGT & OTHER MAJOR CUSTOMERS — Alinta —- Mt Newman, Kalgoorlie — Numerous third party shippers including — Minara Resources — OMG Cawse — Agincourt — AGL — Barrick Australian Pipeline Trust -~
Slide 23: GGT Growth Potential
| GGT + GROWTH POTENTIAL — Several projects under active discussion — Esperance lateral opportunities (eg BHP Ravensthorpe) — Paraburdoo iron ore expansion — Murrin Murrin nickel Stage 2 — WA economy gas driven — Supplies world class mineral province Australian Pipeline Trust -~
Slide 24: GGT Regulatory process
| GGT ¢ Regulatory process — Draft access arrangement announced yesterday — under internal review — APA’s assumptions and valuation lies at the lower end of the range of reasonable outcomes — Draft decision is consistent with APA’s view of where regulator would land at this stage in the process Aust
Slide 25: Parmelia Business
Parmelia Business Australian Pipeline Trust -~
Slide 26: Parmelia map
") Western : _ Port Hedland Dampier | ce | Mt Magnet
Slide 27: Parmelia Acquisition Rationale
- Parmelia * ACQUISITION RATIONALE — Expands WA footprint — Diversification into processing & storage — Aggressive drilling activity and seismic work in Perth Basin with recent success — Increasing demand for gas storage — positive market conditions — Spot market development — Lowcost capacity enhan
Slide 28: Parmelia Asset Overview
> Parmelia « ASSET OVERVIEW — Parmelia pipeline, Dongara processing, Mondarra storage facilities, retail — Unregulated — Pipeline built in 1971 — Total length: 416km — Diameter: 356mm — Alternate pipeline connection between Perth Basin to Perth & southern industrial centres — Connection to Alinta ne
Slide 29: Financing
Financing Australian Pipeline Trust -~
Slide 30: Financing
Financing ] e Total cost (inclusive of all transaction costs) of $206m Funded by $60m equity raising with the balance from cash and existing facilities Pro forma gearing (debt / debt plus book equity) post acquisition, capital raising and the impact of tax consolidation is 65% — includes consolidati
Slide 31: Equity Raising
|, Equity Raising ° Placement of approximately $60 million Institutional bookbuild — Lead Manager: ABN AMRO Rothschild — Co Manager: CommSec New units rank equally with existing units AGL and Petronas to take up their pro rata interests Australian Pipeline Trust -~
Slide 32: Equity Raising
Equity Raising ¢ Indicative placement timetable Institutional briefing 10.30 am Friday, 30 July Books close 5.00pm Friday, 30 July Placement price announced 9.00am Monday, 2 August Settlement Thursday, 5 August New units commence trading Friday, 6 August Australian Pipeline Trust -~
Slide 33: Impact 2004/2005
Impact 2004/2005 Australian Pipeline Trust -~
Slide 34: Impact 2004/2005
| Impact 2004/2005 * FY2004 consensus normalised NPAT is $41m to $43m * 2004 results expected to be in line with consensus * 2005 affected by contracted reduction in MSP revenues as previously advised - Full retail contestability now having a positive impact - Acquisition will more than offset reduc
Slide 35: DBNGP - Update
"| DBNGP - Update * Sales process subject to Confidentiality Agreement ¢ Presently in a 50/50 consortium * Due diligence is largely complete * Bids due 27 August * No certainty of resolution and far from certain that any transaction will in fact occur Australian Pipeline Trust -~
Slide 36: Summary
) Summary ™ Good assets at the right price ® Consistent with APA’s strategy ™ Strengthens APA core business m Adds gas processing and storage m™ Reduces reliance on MSP m™ EPU and cash flow per unit accretive Australian Pipeline Trust -~
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