Origin Energy Limited · ASX:ORG
Origin Energy — UBS Resources Conference 2008
34 slides from Origin Energy's conference presentation, Jun 19, 2008
Slide 1: ASX announcement cover note: presentation to UBS Resources Conference
For personal use only To Company Announcements Office Facsimile 1300 300 021 Company Australian Stock Exchange Limited Date 19 June 2008 From Bill Hundy Pages 34 Subject PRESENTATION Attached for your information is a presentation being made by Mr Grant King, Managing Director, to the UBS Resources
Slide 2: Origin Energy UBS Resources Conference June 2008
For personal use only Origin Energy UBS Resources Conference June 2008
Slide 3: Important Notice
Important Notice • This presentation does not constitute an offer, invitation, inducement or recommendation to For personal use only acquire or dispose of any securities in Origin or investment advice in any jurisdiction, including the USA. This presentation is for information purposes only, is in a
Slide 4: Outline
For personal use only Outline • CSG supply Evolution of CSG in Australia Origin’s CSG position Projects update • Channels to market • Energy prices 3
Slide 5: CSG supply
For personal use only 4 CSG supply
Slide 6: Since 2000 CSG reserves have grown to over 9,400 PJ
Since 2000 CSG reserves have grown from a few hundred petajoules (PJ) to over 9,400 PJ, with significant additions coming at regular intervals… For personal use only 10,000 140 CSG Reserves in Queensland by Company CSG Production in Queensland by Company 9,000 130 120 8,000 Other 110 Sunshine Gas 7,
Slide 7: Origin's CSG permits cover over 17,000 km2 in Bowen and Surat Basins
Origin acquired its first CSG interests in the Peat field over 11 years ago, and Origin now holds CSG permits covering over 17,000 km2 in the Bowen and Surat Basins#... For personal use only • Origin’s Bowen Basin CSG interests include: Spring Gully (94-99%) operator Peat (100%) operator Fairv
Slide 8: Certified 2P reserves of 4,715 PJ and 3P over 10,000 PJ
Origin reviewed its CSG reserves position in May 2008 using the independent reserves certifier NSAI(1) resulting in certified 2P reserves of 4,715 PJ and 3P reserves of over 10,000 PJ For personal use only Origin Equity Interest Reserves Net Reserves Increase CSG Reserves (PJ)(2,3) 1 Jul 07 increase
Slide 9: NSAI independent assessment of CSG reserves
NSAI provided an independent assessment of Origin’s CSG proved, probable and possible reserves based on the results of the exploration and appraisal work performed up to 15 May 08 For personal use only • All estimates of reserves, contingent resources and prospective resources prepared by NSAI are i
Slide 10: Two thirds of 3P reserves 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 such interests… For personal use only • Origin obtained interests in a variety of areas through permit awards and acquisitions from various companies inc
Slide 11: Origin CSG project update
For personal use only Origin CSG project update 10
Slide 12: Origin has substantial interests across Comet Ridge and Undulla Nose
Origin is the only company to have substantial interests across Comet Ridge and the Undulla Nose… For personal use only • Comet Ridge area (Bowen Basin CSG fields) Spring Gully Origin 94% to 99% Operated by Origin Fairview Origin ~23% Comet Operated by Santos Ridge Undulla • Undulla Nose
Slide 13: Spring Gully was developed in phases commencing in 2004
Spring Gully was developed in 4 phases commencing in 2004... For personal use only PL PL PL PL 195 195 204 204 Strathblan Strathblan Wellhead ee Gas Gas Plant Plant 94 wells Strathblane Gas Plant 2x3500 HP compression 24 TJ/d capacity Evaporation Pond Spring Gully Gully Completed Spring Gully Gas Sp
Slide 14: Phase V development will increase capacity to 150 TJ/d
The current Phase V development will increase production capacity to 150 TJ/d Includes: For personal use only • 60 development wells Strathblane Strathblane • 120 km of trunkline Gas Plant Gas Plant & flowlines • Additional 3X3500 HP compressors at Spring Gully Spring Gully Strathblane Gas Plant Gas
Slide 15: Committed to beneficial uses for produced water
Origin Energy is committed to finding beneficial uses for produced water… • Initial development of the Spring Gully For personal use only field utilised water evaporation ponds while investigations into several other water handling options were completed • Reverse Osmosis was identified as the best
Slide 16: Fairview (not operated)
For personal use only Fairview (not operated) • Presently producing 72TJ/d (100% JV) - constrained by processing capacity • Planned compressor station No.3 to increase capacity to over 100TJ/d by January 2009 • Aggressive exploration plans for 2008 / 09 to the north and east of Fairview field Explor
Slide 17: Development of operated Walloons permits
Origin commenced development of its operated Walloons permits after the initial development of Spring Gully… For personal use only • Plans to ramp up to 90 TJ/d by 2011 • Approx 100 wells needed to meet plateau • Development drilling commenced in April 2008 • Gas plant construction to commence Q3 20
Slide 18: Additional interests in Undulla Nose acquired from Pangaea
Origin acquired additional interests in the Undulla Nose region from Pangaea in 2006 (operated by QGC) For personal use only Non-operated interests include •Argyle (40.625%) •Lauren (40.625%) •Kenya (40.625%) •Codie (40.625%) •Kenya East (31.25%) •Bellevue (29.375%) Gas contracts include • 41% share
Slide 19: Comet Ridge and Undulla Nose provide excellent CSG resources
Both Comet Ridge and the Undulla Nose area of the Walloons provide excellent CSG resources, on a par with some of the best CSG fields in the world For personal use only Undulla Nose Comet Ridge (Walloons – Surat Area (Bowen Basin) Basin) Existing Fields Spring Gully / Fairview Talinga / Kenya / Argy
Slide 20: Spring Gully and Talinga/Orana supply Darling Downs Power Station
The Spring Gully and Talinga/Orana fields are currently being developed and interconnected to provide flexible gas supply for the Darling Downs Power Station and current contracts… For personal use only • Supply for the Darling Downs power station (approximately 44 PJ/a) and the RTA contract (23 PJ/
Slide 21: Origin's CSG production outlook to 2011
Origin’s CSG production will reach around 35 PJ/a in FY 2008… For personal use only 120 110 Origin's CSG Production 100 • Origin has around 1,200 PJ of 90 RTA Contract 23PJ/a CSG contracted or committed to third parties over periods Annual Production (PJ) 80 ranging up to 15 years 70 Darling Downs u
Slide 22: Channels to market
For personal use only 21 Channels to market
Slide 23: Demand for gas in eastern Australia likely to increase significantly
Demand for gas in eastern Australia is likely to increase significantly over the next two decades… For personal use only 1,800 Gas demand by sector 1,600 1,400 Gas demand (PJpa) 1,200 1,000 800 600 400 200 0 08 10 12 14 16 18 20 22 24 20 20 20 20 20 20 20 20 20 Residential Industrial Generation Alte
Slide 24: Existing channels to market: power generation and domestic gas
Origin’s existing channel to market includes power generation and domestic gas market… For personal use only Producer Direct 300 buy from Origin buy from Origin JV partners buy from 3rd parties 250 Power Generation Origin Retail Natural Gas Supplies (PJ) Retail Sales 200 150 100 50 0 2008 2009 2010
Slide 25: CSG reserves could supply domestic and export markets
The growth in CSG 2P reserves and contingent resources is building a significant base that has the potential to supply both domestic and export markets For personal use only 23,380 9,728 * Source: Energy Quest May 2008 updated to reflect Origin Energy Reserves Announcement 30 May 2008 24
Slide 26: Creating new channels to market, including LNG
Creating new channels to market is important to monetise this increasing reserves base… 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 10 12 14 16 18 20 22 24 20 20 20 20 20 20 20 20 20 Residentia
Slide 27: Energy Prices
For personal use only 26 Energy Prices
Slide 28: The oil price has been rising steadily
The oil price has been rising steadily for most of this decade… For personal use only WTI Spot Price and Forward Curves 140 May 2008 120 Oil Price in USD per barrel Apr 2008 100 Dec 2007 80 60 40 20 0 05 06 07 2 3 4 11 0 13 08 12 00 00 00 1 20 20 20 b- c- n- r- - /2 /2 /2 ar Ap Fe De 1/ 0/ 1/ Ja M 3
Slide 29: Rising energy prices have increased regional and global gas prices
The rising energy price environment has seen increases in regional and global gas prices… For personal use only This chart brings together international and Australian gas prices in Australian dollars per gigajoule. It shows average UK and US Henry Hub spot gas prices and average landed import price
Slide 30: Coal in eastern Australia traditionally cheap and abundant
While coal in eastern Australia has traditionally been cheap and abundant… Monthly Average Coal Price For personal use only 6 5.5 NEWC Coal Price 5 4.5 4 AUD/GJ 3.5 3 2.5 2 1.5 1 Oct-02 Oct-03 Oct-04 Jan-07 Apr-07 Jan-08 Jul-02 Jan-03 Apr-03 Jul-03 Jan-04 Apr-04 Jul-04 Jan-05 Apr-05 Jul-05 Oct-05 Ja
Slide 31: Coal prices or carbon price would favour gas for base-load
Rising coal prices or a modest carbon price of around $20-30/t would be sufficient to change the relative cost structure of power generation to favour gas for base-load… For personal use only Short run marginal costs of generation vs carbon price 140 120 100 B Brown Coal Gas - CCGT 80 $/MWh Black Co
Slide 32: Higher gas prices increase economically viable CSG resource
As gas prices increase, so does the size of the economically viable CSG resource*… For personal use only Schematic illustration of relationship between gas prices and economically viable CSG reserves * Because of Economically variances in viable CSG cost structure reserves between geographies, (PJ)
Slide 33: Process to accelerate monetisation of CSG assets
In response to these changing conditions Origin has initiated a process to seek opportunities to accelerate monetisation of its CSG assets For personal use only Origin has commenced a formal process to invite proposals from suitably qualified and experienced parties to accelerate the monetisation of
Slide 34: For more information
For personal use only For more information For more information on Origin Energy please contact Angus Guthrie Manager, Investor Relations Email: angus.guthrie@originenergy.com.au Office: +61-2-8345 5558 Mobile: + 61-4-1786 4255 Alternatively visit our website www.originenergy.com.au and follow the p