Genie Energy Ltd. · NYSE:GNE
Genie Energy — Investor Presentation (December 2011)
26 slides from Genie Energy's investor presentation, Dec 12, 2011
Slide 1: Genie Energy Ltd Investor Presentation
Genie Energy Ltd (NYSE: GNE) Energy Investor Presentation December 2011
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward-looking statements. Statements that are not historical facts are forward-looking statements and such forward-looking statements are statements made pursuant to the Safe Harbor Provisions of the Private Securities Titigation Reform Act of 1998.
Slide 3: Cautionary Statements Regarding Oil and Gas Quantities
Cautionary Statements Regarding Oil and Gas Quantities The Securities and Exchange Commission (“SEC”) permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves that meet the SEC's definitions for such terms, and price and cost sensitivities
Slide 4: Genie Overview
Genie Overview OileGas IDT Energy (IDTE) IDT Energy is a retail energy provider (REP) operating in the Northeast U.S. + Founded in 2004, now one of the largest independent residential REPs in New York State + Purchases electricity & gas in wholesale markets for resale to end users + Delivery, billin
Slide 5: Genie Energy
Genie Energy Genie Energy was spun off from IDT Corp to shareholders on October 28'* 2011 Genie Energy IDT Energy Genie Oil & Gas American Shale il (AMSO) Israel Energy Initiatives (IEI) Stock Pr $7.90 Volume 142 thousand “Market Capitalization’ $179 million Cash & Cash Equivalents $104 million Ente
Slide 6: IDT Energy - Overview
IDT Energy - Overview IDT Energy is a leading retail energy provider (REP) * Founded in 2004, now one of the largest independent residential REP’s in New York * Purchases electricity & gas in wholesale markets for resale to end users * Delivery, billing & collections remain responsibility of incumbe
Slide 7: IDT Energy - Investment Thesis
IDT Energy - Investment Thesis Utility Industry Deregulation Presents Large Market Opportunity Market deregulation provides competitive access for the first time to a $240B' market Experienced, Proven Operator In Highly Fragmented Market Management team with years of experience in building and opera
Slide 8: REP Industry Highlights
REP Industry Highlights INDUSTRY HIGHLIGHTS 16 DEREGULATED ELECTRICITY MARKETS + Substantial deregulation has led to a $240B energy retail market Currently, 46 REPs with over $100MM in revenue represent 21.5% of the market + 40 of the 46 REPs offer primarily fixed-price contracts; 6 REPs are success
Slide 9: IDT Energy - Meter + RCE Growth
IDT Energy - Meter + RCE Growth ETERS RESIDENTIAL CUSTOMER EQUIVALENTS (RCEs) From ‘04-09 the company rapidly grew the meter base to the 400k meter level “10-’11 successfully shifted base of meters to higher usage customers as evidenced by the RCE growth Strong Q-O-Q RCE growth in 1Q12 on increased
Slide 10: IDT Energy - Markets & Opportunities
IDT Energy - Markets & Opportunities Res, Meters Migrated to REPs Existing Markets ‘New York 11,480 10,131 1,722 17.0% 20.6% 2005 Pennsylvania 5,650 4613 1344 29.1% 3.6% 2010) 6,763 6,007 393 65% 6.7% 2010) 23,893 20,751 359 16.7% Da Prospect urkets ‘Maryland, Illinois, 13,300 Connecticut, DC *Note:
Slide 11: IDT Energy - Representative Meter Economics
IDT Energy - Representative Meter Economics Electric _GasMeter Dual Meter’ Average Consumption 6,319 617 Gross Profit (per unit)* $0.034 $0.159 Gross Profit $215 $98 $313 Incremental SG&A Expenses $29 $22 $47 Incremental Cash Flow Per Meter $186 $76 $266 os mani aie by ei estas sori ore “ mf sealer
Slide 12: IDT Energy - Results of Operations
IDT Energy - Results of Operations caches ron | zon | son | son | so SES | Revenue $585 S578 $338 $46.4 545.8 $264.7 52014 $203.5 Gross Profit, saz sus $168 $11.0 $16.8 $722 $578 $53.8 Gross Margin % 324% 19.6% 31.2% BSR 367% 273% 28.7% 26.4% SG&A $3.9 $39 $82 su.3 $88 $267 S198 $28.6 Adjusted EBITD
Slide 13: Genie Oil and Gas - Investment Thesis
Genie Oil and Gas - Investment Thesis Growing Demand and Peaking Supply of “Easy” Oil Creates Need For New Sources Exploration Agreements in Two of the Top Three Global Oil Shale Deposits * Genie has secured exploration rights in the Green River Formation (Colorado-U.S. 1.4 Trillion BBL) and Shfela
Slide 14: Oil Shale - Genie's In-Situ Recovery
Oil Shale - Genie’s In-Situ Rec * Oil shale generally refers to a sedimentary rock that contains solid hydrocarbon materials called kerogen ° When oil shale is heated to ~650°F the kerogen generates hydrocarbon liquids and gases; no “fracking” involved * In-situ extraction has significant technical
Slide 15: In situ oil sands development history
1957 -Shell experiments with in situ process on oil sands 1962 - Imperial Oil drills 10 evaluation wells at Cold Lake using in situ technology and builds pilot plant 1967 ~ The world’s first commercial oil sands surface ‘mining operation is started at The Great Canadian Oil Sands plant, producing 30
Slide 16: Israel Energy Initiatives (IEI)
Israel Energy Initiatives (IEI) Exclusive oil shale exploration license in Israel Legend Terminal . * Covers 238 sq. km in south of Hashfela Parga Sao 4 region i z ¢ Estimated 40 billion boe in place Crude Oi Pipelines Elot—Asheion — * Subject to permitting and approvals i — ¢ Upon conclusion of suc
Slide 17: Oil Shale Potential of Israel
Oil Shale Potential of Israel « Israel has one of the largest and best oil shale deposits in the world for in situ conversion * World class resource: * Richness: ~ 23 - 25 gal/ton * Thickness: up to 300 m thick with 100 m thick High Grade Zone + Very Low Water Inflow to Wells * Complete Isolation fr
Slide 18: American Shale Oil - AMSO
American Shale Oil - AMSO AMSO is developing a federal RD&D lease in the Piceance Basin of Colorado + AMSO LLC is 50% owned by Genie & 50% by Total, S.A. * Other RD&D holders include Shell and Chevron + Genie operating during pre-commercial phase + Total funding the majority of R&D expenditures, pro
Slide 19: Illustrative Project Development Timeline
Illustrative Project Development Timeline <: + + + + > Two Years Two -Three Years Three-Four Years Commercial Operations 2 Pilot Phase Demo Pha: $25-35 Million 00 Mill: Million Conduct Design, construct and |_| Construct design and Scale up to full comprehensive operate a pilot operate demo facility
Slide 20: 1Q2012 Financials
1Q2012 Financials Profit & Loss Revenue $45,796 $44,118 $45,796 $43,363 Direct Cost of Revenue 29,010 33,086 29,010 28,641 Gross Profit $16,786 $11,031 $16,786 $14,722 Gross Margin % 36.7% 25.0% 36.7% 34.0% Selling General and Admin. $10,083 $11,599 $10,083 $6,340 R&D and Equity in AMSO 2,716 4,376
Slide 21: Valuation Gap
Valuation Gap Low EBITDA High IDT Energy Industry Multiples sirens $113M -$150M 4. 5 . . - Most Recent Investment onde CATS Kaa Investment Valuation SIESM Cake Cash is Cash Cash Value $104M* Investments + Inches bl from IDT that was paid in car 7
Slide 22: Genie Energy - Investment Thesis
Genie Energy - Investment Thesis Investment Exposure to Two Powerful Trends Within the Energy Sector “Deregulation of the $240B retail energy market Increasing global demand and peaking production of conventional (easy) oil Experienced Management Team *REP led by industry veterans who built the busi
Slide 23: Appendix
Appendix
Slide 24: Reconciliation of Non-GAAP Financials
Reconciliation of Non-GAAP Financials Reconciliation of Non-GAAP Financial Measures In addition to including financial results that ate determined in accordance with generally accepted accounting principles in the United States of America (GAAP), Genie Energy's investor presentation included Adjuste
Slide 25: Reconciliation of Non-GAAP Financials
Reconciliation of Non-GAAP Financials Genie Energy (NYSE: GNE) Pages EBIIDA Subtract (ad) Depreciation and amortization Income (loss) from operations IDT Energy - Results of Operations Page 12 sad Adjusted EBITDA Subtract: Depreciation and amortization Severance and other charges Income from operati
Slide 26: Energy
Energy