Origin Energy Limited · ASX:ORG
Origin Energy — Merger or Acquisition (July 2008)
23 slides from Origin Energy's merger presentation, Jul 4, 2008
Slide 1: Origin Energy rejects BG Group's unsolicited conditional takeover bid
To Company Announcements Office Facsimile 1900 999 279 For personal use only Company Australian Stock Exchange Limited Date 4 July 2008 From Bill Hundy Pages 23 ORIGIN ENERGY REJECTS BG GROUP’S UNSOLICITED CONDITIONAL Subject TAKEOVER BID Attached for your information is a presentation to be made by
Slide 2: Origin Energy, 4 July 2008
For personal use only Origin Energy 4 July 2008 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 For personal use only presentation is for information purposes only, is in a summary form, an
Slide 4: Contents
Contents • Origin Board to recommend shareholders For personal use only reject BG’s bid • Response to BG’s contentions on Origin’s CSG reserves • Expanding markets for CSG: Power generation LNG 3 3
Slide 5: Origin Board to recommend shareholders reject BG's unsolicited takeover bid
Origin Board to recommend shareholders reject BG’s unsolicited takeover bid For personal use only • BG announced on 24 June an intention to make an unsolicited off-market takeover bid at $15.50 cash per share, less the final dividend (BG says Bidder’s Statement and Offers will be despatched to Origi
Slide 6: BG in effect attempting to secure an option over Origin with a highly conditional bid
BG in effect are attempting to secure an option over Origin, and to impose unduly restrictive conditions on Origin’s business activities, by announcing a highly conditional bid at a price already rejected by the For personal use only Origin Board • BG’s bid requires a number of regulatory approvals
Slide 7: Response to BG's Contentions on Origin's CSG reserves
Response to BG’s Contentions on Origin’s CSG reserves For personal use only • Origin reserves growth • Reserves methodology • Origin reserves quality and well density • Reversion • Reserves available for an LNG development • CSG benchmarks 6 6
Slide 8: The CSG industry is characterised by rapid reserves growth
The CSG industry is characterised by rapid reserves growth at this stage in the development cycle For personal use only Source: RISC Presentation to UBS Conference 19 June 2008. 7 7
Slide 9: Origin's reserves increases are in line with expectations at this stage of development
Origin’s reserves increases are in line with expectations at this stage of development and are consistent with % changes across the industry Spring Gully case study For personal use only 1P and 2P reserves converging on 3P reserves since 2003 • The convergence of 1P and 2P reserves to 3P reserves in
Slide 10: Origin has a prime acreage position in the sweet spots of Queensland CSG
Origin has a prime acreage position in the “sweet spots” of Queensland CSG in terms of both quantity and quality of resource For personal use only Surat & Bowen Basins Acreage Position Spring Gully/Fairview Area Undulla Nose Area Note: The Undulla Nose Area is represented here as bounded by the Leic
Slide 11: Over 75% of Origin's operated CSG reserves are in areas with higher well densities
Over 75% of Origin’s operated CSG 2P & 3P reserves are in areas with higher well densities For personal use only Wells per Acre and Net Acres: Origin v QGC Reserves • Origin has over 75% of operated Resources reserves in areas with higher well density (first quartile on A chart) A This gives confi
Slide 12: Two thirds of Origin's 3P reserves are not subject to reversionary interests
While some of Origin’s CSG interests were acquired with reversionary interests attached, two thirds of Origin’s 3P reserves are not subject to any reversionary interests… For personal use only • Origin obtained interests in a variety of areas through permit awards and acquisitions from various compa
Slide 13: Under current market conditions and planned development, reversion will not occur
Under current market conditions and planned development, reversion will not occur Origin Energy Reserves and Contingent Resources • The theoretical For personal use only 25,000 maximum reversion Theoretical Maximum 20,000 Reversionary Interest of current 3P Petajoules (PJ) Reserves is 15% and 15,000
Slide 14: Origin has clear leadership in certified CSG reserves for an LNG project
Origin has clear leadership in certified CSG reserves, and is well positioned to satisfy the reserves threshold for an LNG Project… For personal use only Current Reserves & LNG Project Requirements 12,000 3P Internally Committed • Origin has the highest 2P and 2P Contracted 3P reserves available for
Slide 15: Recent CSG transactions provide a range of valuation benchmarks
Recent CSG transactions provide a range of valuation benchmarks upon which to value Origin’s CSG assets… For personal use only Valuation Metrics $/GJ (3P Reserves) QGC – BG Group $0.67 Santos – Petronas $1.32 - $1.65 Arrow – Shell $0.52 - $0.77 Source: Origin estimates based on publicly available in
Slide 16: Expanding markets for CSG: Power generation and LNG
For personal use only Expanding markets for CSG: Power generation and LNG 15 15
Slide 17: Origin has focussed on creating new channels to market for gas in Eastern Australia
Origin has for some time focussed on the need to create new channels to market for monetising the increasing gas reserves base in Eastern Australia… For personal use only Potential Gas demand by sector – including three CSG to LNG projects of 3MTPA 2,500 2,000 Gas demand (PJ/a) 1,500 1,000 500 0 08
Slide 18: Origin's fuel-integrated generator-retailer strategy provides domestic channels to market
Origin’s fuel-integrated generator-retailer strategy provides us with domestic channels to market through power generation and the domestic gas market For personal use only Origin Gas Demand and Sources of Supply 300 Potential additional gas Source: Origin data and into power generation internal est
Slide 19: Commitment to proceed with Mortlake Power Station and Uranquinty purchase
Origin has today announced our commitment to proceed with our $640M Mortlake Power station project and the $700M purchase of Uranquinty Power Station from Babcock & Brown Power For personal use only Mortlake Uranquinty • As announced in late 2007, Origin’s Board • Origin has previously announced tha
Slide 20: Origin's retail position provides the opportunity to develop generation capacity
Origin’s retail position provides it with the opportunity to develop generation capacity… • Origin has the ability to satisfy its For personal use only Energy Demand electricity requirements from Peak Demand 40 8,000 either its own assets (power Annual Demand and Generation dispatched (Twh) plants)
Slide 21: By 2010 Origin will have quadrupled its gas-fired power generating capacity
By 2010, with Uranquinty and Mortlake, Origin will have quadrupled its gas-fired power generating capacity and will hold a balance of efficient baseload and flexible open-cycle plant… For personal use only • Total gas-fired generation capacity to increase from ~700 MW today to 2,800 MW by 2010 plus
Slide 22: Origin is seeking to demonstrate the value of its CSG assets
Origin is seeking to demonstrate the value of its CSG assets by pursuing opportunities that accelerate the monetisation of these assets For personal use only • In early June, Origin commenced a formal process to invite proposals from suitably qualified and experienced parties, who represent the lead
Slide 23: Summary
Summary For personal use only • Origin Board to recommend shareholders reject BG’s highly conditional bid, which fails to adequately reflect the value of Origin’s business and prospects. • Origin has a prime acreage position in Queensland CSG in terms of both quality and quantity of resource and has