Origin Energy Limited · ASX:ORG
Origin Energy — Citi Australian Investment Conference 2009
36 slides from Origin Energy's conference presentation, Oct 19, 2009
Slide 1: ASX announcement cover note for presentation
For personal use only To Company Announcements Office Facsimile 1300 135 638 Company ASX Limited Date 19 October 2009 From Bill Hundy Pages 36 Subject PRESENTATION Attached for your information is a presentation being made by Grant King, Managing Director to the Citi Australian Investment Conference
Slide 2: Citi Australian Investment Conference
19 October 2009 Sydney For personal use only Citi Australian Investment vest e t Conference Co e e ce 1
Slide 3: Important Notice
Important Notice This presentation does not constitute investment advice, or an inducement or recommendation to acquire or dispose of any securities in Origin, in any jurisdiction (including the USA). This presentation is for information purposes only, is in a summary form, and does not purport to b
Slide 4: Outline
Outline For personal use only 1. Strategy, Performance, Growth 2. Australia Pacific LNG 3. Carbon and Renewables Strategy 4. Outlook 3 3
Slide 5: 1. Strategy, Performance, Growth
1. Strategy, Performance, Growth For personal use only 4 4
Slide 6: Financial objectives and business strategies respond to changes in the energy industry
Origin’s financial objectives and business strategies have been established to respond to changes in the energy industry… For personal use only • Financial Objectives – Steady and predictable cashflows – EPS growth of 10-15% pa on average • Business Strategy – Positioned in the competitive (rather t
Slide 7: Origin has grown each business area and deepened integration
Origin has grown the operational dimensions of each business area and has consistently sought to deepen integration… For personal use only Fuel Generator Retailer A leading producer of gas in Eastern Largest owner and developer of gas A leading wholesaler and retailer of Australia involved in the de
Slide 8: Strategy helps manage volatility in wholesale commodity prices
The effective implementation of this strategy helps us manage the volatility in the wholesale price of commodities… QLD Spot and Forward Contract Electricity Prices For personal use only International oil and condensate prices 150 NW Shelf Condensate 140 TAPIS SPREAD 120 120 Origin Realised Price e
Slide 9: Growth in underlying earnings
… and has delivered growth in underlying earnings EBITDAF by business type For personal use only 1400 1200 Underlying Profit CAGR 23% 1000 EBITDAF CAGR 19% $ million 800 600 400 200 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 Networks E&P Generation Retail Contact Source: Origin Origin OriginProd
Slide 10: Growth in underlying earnings per share and shareholder value
The growth in earnings has translated into significant growth in underlying earnings per share and increasing value for shareholders • Free cash flow per share(1) has grown at a CAGR 12% For personal use only since listing • Underlying earnings per share has increased from 17 cents in 2001 to 60 cen
Slide 11: Statutory profit driven by ConocoPhillips investment in CSG assets
Origin’s Statutory Profit for the full year of $6.9 billion was driven by For personal use only ConocoPhillips’ investment for a 50% interest in Origin’s CSG assets… Statutory Profit $6,941 million up 1243% Statutory Earnings per Share 791 cps up 1241% Underlying Profit $530 million up 20% Underlyin
Slide 12: Strong position following the APLNG transaction
Following the APLNG transaction Origin is in a strong position to grow and develop its business with access to cash and undrawn committed debt facilities of $5.3 billion and substantial additional balance sheet capacity For personal use only As at 30 June 2009 Undrawn Available Adjusted Adjusted Com
Slide 13: $5.3 billion of cash and undrawn debt facilities to fund growth
With access to $5.3 billion of cash and undrawn debt facilities, Origin is well placed to fund opportunities to grow and develop the business For personal use only Origin Debt & Bank Guarantee Maturity Profile Origin Committed Growth Capex Profile 2,400 2,400 2 200 2,200 Loans & Bank Guarantees - Un
Slide 14: 2. Australia Pacific LNG
2. Australia Pacific LNG For personal use only 13
Slide 15: Origin and ConocoPhillips establish Australia Pacific LNG joint venture
In September 2008 Origin entered into a transaction with ConocoPhillips to establish a CSG to LNG joint venture known as Australia Pacific LNG (APLNG)… For personal use only ConocoPhillips has subscribed for a 50% interest in Australia Pacific LNG Assets Australia Pacific LNG includes all of Origin’
Slide 16: APLNG selects Gladstone site for downstream operations
APLNG is progressing well with the development of its CSG to LNG project and has now selected a site at Gladstone for its downstream operations For personal use only • APLNG has secured the Laird Point site on Curtis Island in the Port of Gladstone for its proposed p p CSG to LNG pplant • 230 hectar
Slide 17: APLNG continues to grow its CSG reserves
APLNG continues to grow its CSG reserves with significant reserves increases that demonstrate the size and quality of APLNG’s CSG resource… For personal use only 3C 2C 3P 2P Source: Origin APLNG’s Reserves (PJ) 30 Jun 2008 30 Jun 2009(1) Change Increase 2P Reserves 4,793 7,265 + 2,472 + 52% 3P Reser
Slide 18: APLNG is Australia's largest CSG producer
APLNG is Australia’s largest producer of CSG, representing around one third of total CSG production… For personal use only • Production capacity is growing significantly and by 2011 annual CSG production of over 100 PJ is i ttargeted t d tto service i d domestic ti contracts • In meeting this growin
Slide 19: Asian trend towards oil price parity for LNG
In the Asian market in particular there has been a trend towards oil price parity which has resulted in higher LNG prices for gas and has been a key driver of emerging interest in CSG For personal use only Asian Term Prices Late 2006 $18 2007 Oil Parity $16 Asian Prices Converge 2008-09 Ex-ship LNG
Slide 20: APLNG Project Update
APLNG Project Update For personal use only Milestone Timing ConocoPhillips Optimised CascadeSM Q3 2008 process selected Initial Advice Statement (IAS) Q1 2009 submitted Project declared as Significant by Q2 2009 the Queensland Government , APLNG Resources increased to 7,265 Q2 2009 Q PJ (2P) Curtis
Slide 21: 3. Carbon and Renewables Strategy
3. Carbon and Renewables Strategy For personal use only 20
Slide 22: Portfolio well positioned for a carbon constrained environment
Origin’s portfolio is well positioned for a carbon constrained environment… For personal use only Fuel Generator Retailer Origin has a significant, diverse Established generation capacity Australia’s leading GreenPower and balanced range of renewable in hydro and geothermal with a provider with a gr
Slide 23: Increased renewable energy target legislated
In August 2009 the Federal Government legislated an increased renewable energy target in response to climate change … For personal use only (2) • Starting in January 2010 with a target of 12,500 GWh • 2020 target will be ~45,000(1) GWh (from the prior 9,500 GWh target) • Target maintained until 2030
Slide 24: RET will drive investment in wind and peaking generation
The RET will drive significant investment in wind power generation and will require a significant capacity of peaking generation to be built to support its intermittency… For personal use only Forecast Additional NEM Generation by • Wind is currently the most cost effective Fuel Type to Meet Demand
Slide 25: Portfolio of renewable energy supply
Origin has positioned itself to respond to the RET with a portfolio of renewable energy supply… For personal use only • Origin initially invested in wind through third parties by underwriting wind farm developments p byy others through g long g term power purchase agreements • Origin’s first 30 MW w
Slide 26: Portfolio of peaking gas fired generation sites
In addition, Origin has a significant portfolio of developing and permitted peaking gas fired generation sites… For personal use only • By late 2010 Origin will have around 1,600 MW of operating gas fired peaking generation • Origin has another 855 MW of gas fired peaking capacity available under lo
Slide 27: Developer of emerging renewable technologies
Origin is a long time supporter and developer of emerging renewable technologies… Geothermal For personal use only • Origin believes that hot rock geothermal power developed at scale could provide a superior long term solution to meeting RET targets • Origin considers the Innamincka Joint Venture to
Slide 28: Carbon Pollution Reduction Scheme
The Federal Government’s policy response to climate change also includes the Carbon Pollution Reduction Scheme (CPRS) For personal use only • The CPRS is an emissions trading scheme designed to create a market price for carbon • Commencement deferred to July 2011 (originally 2010) • Permit price fix
Slide 29: Economics of gas versus coal as carbon prices increase
As carbon prices increase, the economics of gas will surpass coal as the lowest cost fuel for generation making it an attractive option for future base load generation requirements… For personal use only Long g Run Marginal g Cost of Black Coal vs CCGT with $ $6 GJ Gas 200 Carbon Intensity by Fuel T
Slide 30: CPRS uncertainty complicating generation investment decisions
Uncertainty around the Carbon Pollution Reduction Scheme is complicating investment decisions for generation for many market participants… MW Origin's Generation Capacity For personal use only • The likelihood of an ETS is discouraging 8,000 investment in new coal fired baseload generation 7,000 2,0
Slide 31: 4. Outlook
For personal use only 4. Outlook 30
Slide 32: Projects expected to contribute in the coming financial year
A number of projects Origin has been developing are expected to make initial or significantly increased contributions to financial performance For personal use only in the coming financial year • Full year contribution from the Uranquinty and expanded Quarantine Power Stations • Full year contributi
Slide 33: Major projects expected to contribute in the years ahead
Origin will continue to progress the development of several major For personal use only projects in its existing business which are expected to make contributions in the years ahead • Development D l off the h 550 MW M Mortlake l k PPower SStation i which hi h iis d due ffor completion l i iin llate
Slide 34: Access to capital with $5.3 billion in cash and undrawn facilities
The past year has been challenging for financial markets and many companies have been severely constrained in accessing capital to fund their businesses… For personal use only As at 30 June 2009 Undrawn Available Adjusted Adjusted Committed Cash Funding N C Net Cash h(1) G Gross D Debt b D b Debt Ca
Slide 35: Citi Australian Investment Conference
19 October 2009 Sydney For personal use only Citi Australian Investment vest e t Conference Co e e ce 34
Slide 36: Further Information
Further Information For personal use only Investors Angus Guthrie Manager, g , Investor Relations Email: angus.guthrie@originenergy.com.au Office: +61-2-8345 5558 Mobile: +61-4-1786 4255 Website www.originenergy.com.au 35 35
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