Genesis Energy Limited · NZX:GNE
Genesis Energy — Merger or Acquisition (November 2016)
13 slides from Genesis Energy's merger presentation, Nov 16, 2016
Slide 1: Acquisition of additional 15% stake in the Kupe Joint Venture
Acquisition of additional 15% stake in the Kupe Joint Venture
Slide 2: Disclaimer
Disclaimer Purpose: This presentation is for information purposes only. This material is not, and does not constitute an offer, invitation or recommendation to subscribe for, or purchase any shares. Neither this material, nor anything contained in it, will form the basis of any contract or commitmen
Slide 3: Transaction Highlights
Transaction Highlights Acquisition of New Zealand Oil and Gas’ 15% stake in Kupe Transaction Acquisition of NZOG’s 15% stake in Kupe JV for $168m increasing Genesis Energy’s stake to 46% Strategic Greater flexibility over future gas supply and increased JV influence Balance Sheet Strengthened fundin
Slide 4: Strong Strategic Rationale
Strong Strategic Rationale Greater fuel flexibility and JV influence 1. Enhances previously communicated ‘Integrated Fuels Strategy’ to create value from production through to thermal generation and retail: ‒ Ownership of more uncontracted gas volumes ‒ Additional LPG volumes, 21% of national produc
Slide 5: Improving Integrated Fuels Strategy: Gas
Improving Integrated Fuels Strategy: Gas Significant value in future uncontracted gas Projected Kupe Gas Sales1 • Genesis Energy sees significant value in uncontracted gas not covered by current GSAs given recent reserve upgrades Pre Transaction 124 53 118 • This could provide a significant +48% sou
Slide 6: Improving Integrated Fuels Strategy: LPG
Improving Integrated Fuels Strategy: LPG Platform to grow LPG business Genesis Energy share of New Zealand LPG production • Acquisition of NZOG’s Kupe stake will increase Genesis Energy’s share of total New Zealand LPG Genesis Energy 14% production from 14% to approximately 21% Pre Deal Others 86% •
Slide 7: Impact of Transaction on Kupe JV
Impact of Transaction on Kupe JV Operations unchanged but one less party • Origin Energy and Mitsui E&P Ownership of Kupe Oil & Gas Field remain partners • Origin Energy will remain the Pre operator Origin Energy 50% Genesis Energy 31% NZOG 15% Mitsui 4% transaction • Increased stake provides more i
Slide 8: Positive Impact on Earnings
Positive Impact on Earnings EBITDAF expected to increase • Transaction is expected to increase annualised EBITDAF by Financial Impact FY2016 FY2017 approximately $39m of Acquisition Estimated Pro-forma Estimated $m Incremental Impact1 Incremental Impact2,3 • Based on pro-forma FY2016 estimates, earn
Slide 9: Capital Structure Impact
Capital Structure Impact Improvement in key metrics 2.9 Estimated Net Debt/EBITDAF ratio Phase II Development • Acquisition supports key metrics of 2.8 2.7 Net Debt/EBITDAF ratio Net Debt/EBITDAF and Dividend payout ratio in 2.6 2.5 the medium term 2.4 2.3 • Supports the progressive dividend policy
Slide 10: Indicative Timetable
Indicative Timetable Aim to complete before Christmas Estimated timing (subject to confirmation) Announcement of transaction 16 November 2016 NZOG EGM to seek approval by shareholders 16 December 2016 Effective date of acquisition 1 January 2017 Kupe Acquisition 10
Slide 11: Appendix: Operational Data
Appendix: Operational Data Positive impact on Genesis Energy • Additional 15% stake would have increased Genesis Energy’s oil, LPG and gas sales by c48% in FY16 • Also lead to similar increase in share of reserves remaining in the field Genesis Energy Pro-forma NZOG stake 15% FY2016 results stake 31
Slide 12: Appendix: Deal Structure
Appendix: Deal Structure Acquisition of 100% of shares in four NZOG subsidiaries Genesis New Origin Zealand Oil Mitsui Energy Ltd Energy & Gas Ltd Genesis National Nephrite Kupe Power Petroleum GP No. 2 Ltd GP No. 5 Ltd Petroleum Enterprises Royalties Investments Equities Ltd Ltd Ltd Ltd Ltd Kupe 12
Slide 13: Appendix: Deal Structure
Appendix: Deal Structure Acquisition of 100% of shares in four NZOG subsidiaries Genesis Origin Mitsui Energy Ltd Energy Genesis Power GP No. 2 Ltd GP No. 5 Ltd Investments Ltd National Nephrite Kupe Petroleum Kupe 11.0% 4.0% Petroleum Enterprises Royalties Equities Ltd Holdings Ltd Ltd Ltd Ltd 12.7
Genesis Energy — Merger or Acquisition (November 2016) on 6ix