Origin Energy Limited · ASX:ORG
Origin Energy — Morgan Stanley Asia Pacific Summit 2006
49 slides from Origin Energy's conference presentation, Nov 14, 2006
Slide 1: ASX announcement cover fax: presentation to Morgan Stanley summit
Origin energy To Company Announcements Office Facsimite 1300 300 021 Company Australian Stock Exchange Limited Date 14 November 2006 From Bill Hundy Pages 49 Subject PRESENTATION Attached for your information is a presentation to be made by Mr Frank Calabria, Chief Financial Officer to the Morgan St
Slide 2: Investing for growth
drig Investing for growth Morgan Stanley Asia Pacific Summit Singapore __-Novembér 2006 ~~
Slide 3: Important Notice
important Notice Page 2 Any forward looking information in this presentation has been prepared on the basis of a number of assumptions which may prove to be incorrect and these statements speak only as of the date of this presentation. This presentation should not be relied upon as a recommendation
Slide 4: Outline
Outline ¢ Industry background and Origin’s strategy ¢ Strategy Implementation e Financials Page 3 Origin.
Slide 5: Industry background and Origin's strategy
Industry background and Origin’s strategy ecm iesecanennibinmnnesicnesttittt necesita gnc en a
Slide 6: End use energy sales in Australia and NZ growing steadily
End use sales of electricity, gas, and related products and services in Australia and NZ are around A$40 billion per annum and are growing steadily with energy usage Australian End Use Energy Sales A GROWING MARKET and Growth in GDP « Growth in domestic Energy Sales (PJe} GDP {%) » demand for natura
Slide 7: Changes to Australia's energy industry over the last decade
Changes to Australia’s energy industry over the last decade provide the opportunity for some companies to grow more rapidly than the market as a whole... Qid power —G asNezt Cumulative asset sales in the Australian energy sector since 1995 sale gets takeove, 100 _ the nod by 90 Gln Progress Me ie 5,
Slide 8: Origin's financial objectives and business strategies
Origin’s financial objectives and business strategies have been established to respond to changes in the energy industry since the mid 90’s... ¢ Financial Objective - Steady and predictable cashflows ~ EPS growth of 10-15% pa on average « Business Strategy - Positioned in the competitive (rather tha
Slide 9: Strategies have resulted in significant growth increasing shareholder value
These strategies have resulted in significant growth increasing value for shareholders a BFCFPS *” arcr + Free cash flow per share!) has wDPS 1 68 grown at a CAGR 25% since listing « EPS has increased from 13 cents per share in 2000 to 42 cents per share in 2006 cents per share (A$) « Since 2001 Gri
Slide 10: Strategy implementation
JIE Strategy implementation
Slide 11: Positioned in the competitive segments of the Australian energy industry
Origin has positioned itself in the competitive (rather than regulated) segments of the Australian energy industry... .. and by implementing this strategy effectively can better manage risk and enhance the range of growth opportunities Page 10
Slide 12: Exploration basics: gas and oil near domestic markets
Me Tate 7 Hs uy Hy fy OIA, i) Ty a Per: Basics We explore for gas and oil mostly close to domestic energy markets in Australia and New Zealand. Exploration in these areas provides new opportunities for Origin Energy to supply retail and wholesale markets. New Zeatand Page 1t Origin
Slide 13: 2P reserves increased significantly year on year
Origin’s 2P reserves increased significantly year on year with reserves additions in Spring Gully adding 170 PJe... Proved and Probable Reserves (PJe)'” PJe Mmboe 2P reserves at 30 June 2005 2,220 381 add field appraisal (Spring Gully) 170 29 add acquisitions (Pangaea CSG, BassGas, Otway) 171 29 fes
Slide 14: Perth Basin oil depleting; condensate and LPG reserves significant
While oil reserves in the Perth Basin are depleting quickly Origin has significant condensate and LPG reserves... Sales gas & LPG Condensate Crude oil Total ethane PJ Kt KbbI Kbbi Pje Mmboe 2P at 30 June 2005 1,986 1,667 20,266 6,992 2,220 381 Additions and revisions 277 207 304 840 294 50 Productio
Slide 15: Onshore exploration wells and offshore prospects
Origin expects to participate in around 70 onshore exploration wells during this financial year... 7 Povaney Taranaki Onshore exploration wells: Cooper Basin 33 Coal Seam Gas 18 Perth Basin 9 Other onshore 12 <2) a .. While offshore several potentially high impact prospects are being addressed by se
Slide 16: Development projects
aL Ini actin AIEEE LOR RELEREE CREE EEE! u The growth of the company tomorrow is taking form today through the identification, planning, approval and construction of major development projects. Highly capital intensive and taking five or more years to develop, these projects will help drive Origin E
Slide 17: Initial production from Spring Gully field
Initial production from the Spring Gully field has started to monetise Origin’s substantial reserve base... « Initial Stage 1 development of $199 million completed on time and on budget including 80 km trunk gas pipeline, gas plant, water pondage, initiat wells and flowlines « Spring Gully productio
Slide 18: BassGas production and Otway Gas Project
BassGas commenced production during June 2006 while the Otway Gas Project is expected to commence commissioning late in the March quarter 2007 Bran Ct Weenie BassGas”* Pipeline BassGas Project (42.5%) Project operational and meeting contractual production Revenue bocked to P&L from 4 September 2006
Slide 19: Kupe Gas Project approved in New Zealand
In New Zealand the Kupe Gas Project has been approved, and new exploration seismic has been acquired | % Kupe Gas Project (50%) [=] sae ain Woe : : ; sa8 in » Final investment decision approved on 28 June : ise é « Contract for drilling rig awarded es & : >, ood Fastin twee fe a + Technip awarded of
Slide 20: Option to build two base load gas fired power plants
Origin is creating the option to build two base load gas fired power plants in areas where gas is expected to be long... Power Plant Developments Solar Two power projects being progressed, each * SLIVER modules continue to be scaled up to 1000 MW at: up « 75W module undergoing reliability testing, 1
Slide 21: Capital expenditure profile on growth projects
We continue to invest in growth and have a number of major development projects approved or in an advanced stage of planning which will provide future growth in earnings Origin Energy potential capital expenditure profile on growth projects 800 FY 06 free 700 cash flow = A5583 million & 600 +4 | W S
Slide 22: Gas, oil and power generation assets
SDM iectiaE: ABEL Ai LOR RELEREE CREE EEE! Origin Energy and Contact Energy are major producers of energy in their respective markets. Origin Energy generated 1.6 terawatt- hours of electricity in 2005/06 and produced 78 petajouies equivalent of natural gas, condensate, LPG and crude oil. In New Zea
Slide 23: Map key: producing assets and generation plants
Map key Conventional off & gas parralts Coal seacn gas permits LOG seaboard terminal 4 Origin power plant | Contact power plant we Rockgas LPG depot Contact awer Iarwl i prinhane hydra power plant yineny Lactbroke Grove! Otway Basin Producing assets, generation plants and major LPG terminals in Aust
Slide 24: E&P run rate to exceed 100PJe pa by June 2007
New projects will increase the “run rate” from the E&P segment to over 100PJe pa by June 2007 with 80% of production natural gas Origin Energy production data for year ended 30 June 2006 by area Natural Gas Crude Oil LPG Condensate | Total Total Area Ple kbbls — ktonnes kbbls | PJe mmboe Cooper 27 3
Slide 25: Spring Gully monetising CSG reserve base
initial gas production from the Spring Gully field has started to monetise Origin’s substantial CSG reserve base... CSG Reserves i3 | CSG Production 2P Reserves (PJ) ao i=} oS Annuai Production (PJ) .. Which represents around one third of the proved and probable CSG reserves reported by industry in
Slide 26: Contact's generation responded to higher wholesale prices
Contact’s generation responded to higher wholesale prices. Significant increases in thermal generation more than offset reduced hydro generation caused by dry weather Total generation was 11,534 GWh for 12 months ended 30 June 2006. An increase in thermal generation by 1,947GWh more than offset the
Slide 27: High planned availability across Australian plants
In Australia, Origin Energy experienced high planned availability across all its plants... Major Origin | Origin | Capacity | Type | Operation | Availability | Contracting Power Int. % MW Party Plants Worsley 50 120 Cogen | Base 85% Western Power & Worsley Bulwer Is. 50 32 Cogen | Base 95% BP Osborn
Slide 28: Electricity and gas purchasing in the NEM and New Zealand
aan actin ANTE LUE REL EEE EBLE BEE TE In Australia, we buy electricity from the National Electricity Market (NEM). Prices are set on a half hourly basis through balancing market supply and demand. We have a large portfolio of hedge contracts which help protect the company and our customers from the
Slide 29: Substantial portfolio of equity and contracted natural gas
Origin has a substantial portfolio of both equity and contracted natural gas available to it... Upstream saies to QAL, Incitec Pivot, Energex AGL, BP, Origin and gas purchase agreements from various parties Significant gas contracts oe ae from the South Austratian Moownts and Queensiand Cooper Basin
Slide 30: Low wholesale electricity prices in Australia
The low level of wholesale electricity prices in Australia has made purchasing of the majority of electricity requirements appropriate to date... $400 5 [= Monthly Average Spot 595 | . . Price S90 ; Victorian Spot and Forward Contract 2008 85 4 sear ee P 008 i Electricity Prices Historicat $86 + For
Slide 31: Origin buys LPG each year for resale
Origin buys over 500 ktonnes of LPG each year for resale to customers Average International Propane Price (CP) 1,200 Jut04 - Jund5 JulB5 ~ Juund6 ASSI9 AS6SS 1,000 + AC A YY 800 + 600 + Propane price ($A) 400 + 200 + o4 Jule Oct Jan- Apr- Jule Oct- Jan- Apr- C4 O4 05 05 05 ite) 06 06 The internation
Slide 32: Sells energy to more than two million customers
Origin Energy sells electricity, natural gas and LPG to more than two million customers in Australia, New Zealand and the Pacific. In New Zealand, Contact Energy has more than 594,000 gas and electricity customers. Origin Energy - Retail energy sales Natural Gas Electricity LPG Sales (PJ) 127 . - Sa
Slide 33: Deregulation and contestability in Australian energy
Deregulation and the introduction of contestability in the Australian energy sector commenced in the mid 1990’s... Vie Gas electricity SA Gas electricity Nsw Gas electricity QLD Gas electricity WA Gas electricity Outer Bar Inner Bar — [Not Contestable’ = Galy t .. but gradual implementation has left
Slide 34: Origin has increased its share of energy markets
Origin Energy has increased its share of energy markets substantially over this time... Eastern Australia Eastern Australia Market share of customers: 1998 Market share of customers: 2005 Origin Energy 4% Origin Energy 15% ENon Government Companies MOrigin Energy @Qld Government MNSW Government EBVi
Slide 35: Churn rates remain high; net customer account gain
Churn rates remain high. This year Origin acquired over 325,000 new accounts for a net gain of 22,000 gas and electricity accounts June 2006 Customer Numbers (in thousands) Mass Market Churn: Completed & Pending* Natural Electricity | Total 60% —.... snetpeetnnnttsenae ssy | ommvic tec | 2005 900 91
Slide 36: Gross margin for all products increased year on year
The gross margin for all products increased year on year. Retail Gross Margin (§) and EBIT Margin (é - Year on year gas gross margin increased tail Gross Margin (8) an niin) on higher tariffs and strong second half 700 4 _— | 70% due to cool weather + Electricity gross margin higher on lower purchas
Slide 37: Renewables
drig Renewables
Slide 38: Advocacy role on climate change and carbon regime
Origin Energy has taken an advocacy role in the debate surrounding climate change and a carbon regime... The Business Case for Early Action 2 28 Austraiian Buviasss Roundtable on Climate Change .. as we believe that carbon is an inherent but unrecognised cost in the current global use of energy 2 Gi
Slide 39: Selecting investments carefully without federal policy framework
With the lack of a consistent federal policy framework Origin has selected its investments carefully... ... taking modest bets and securing options where outcomes are uncertain Page 3 Origin |
Slide 40: GreenEarth range of products
in the Retail area our GreenEarth range of products has cemented us as the leading green energy provider... Lots . Sept + Over 100,000 green energy i customers on a range of products « First greenhouse-gas neutral natural gas offering ¢ First solar-electricity retail product ¢ First to launch a ligh
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Slide 42: Profit & Loss
Profit & Loss Page 4t Jun 01 Jun02 Jun03 Jun04 Junos5 . (Sm) (Sm) Sm) Sm) (Sm) Revenue 1,679 2,429 3,352 3,556 EBITDA 305 405 944 532 EBIT 173 231 295 329 Net Financing Cost!) (32) (43) (49) (45) | Tax expense (38) (54) (80) (77) . 7 Minority Interests (6) (5) (5) (2). NPAT 98 129 162 205 Basic EPS
Slide 43: Origin reports its business across four segments
Origin reports its business across four segments covering its operations in Australia, New Zealand and the Pacific... Exploration and Production EBITDA | FEC Over 2,436 PJe 2P reserves and annual production of 78 PJe 1 +Diverse acreage position across Australia and New Zealand A leading A Australian
Slide 44: Growth has required significant capital expenditure
Origin’s growth has required significant capital expenditure. Acquisitions in the Retail and Generation areas have provided immediate contributions... Juno1 Jun02 Jun03 Jun04 Jun05: Jun 06 ($m) (sm) ($m) ($m). (Sm) (Sm) Growth & Acquisitions E&P 56 129 179 313 335 600 Retail 344 78 154 46 42 56 Gene
Slide 45: Cash flow measures as primary measure of performance
Origin uses cash flow measures as the primary measure of performance within the business... Jun01 Jun02 Jun03 Jun04 Jun05 Jun 06 (sm) Sm) Sm) Sm) Gm) Sm) EBITDA 305 405 491 532. 918—:1,087 Non-cash items (8) (17) 13 25 4 : (10) Change in Working 11 16 39 (48) (31) 16 Capital of. Stay in business CAP
Slide 46: Conservatively geared balance sheet
This has allowed Origin to maintain a conservatively geared balance sheet and take on the extra debt to fund ongoing investment in growth Jun 01 Jun02 Jun03 Jun04 Jun05 Jun 06 Net debt ($m) 727 633-732-861 2,743 2,411 Total equity ($m) 1,328 1,626 1,790 1,939 3,519 3,646 Adjusted Debt / (debt + 35%
Slide 47: Investing for growth
drig investing for growth
Slide 48: For more information
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 prompts to the Invest
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