Origin Energy Limited · ASX:ORG
Origin Energy — Merger or Acquisition (September 2008)
26 slides from Origin Energy's merger presentation, Sep 8, 2008
Slide 1: Origin selects ConocoPhillips to acquire a 50% share in a CSG to LNG Joint Venture
Origin selects ConocoPhillips to acquire a 50% share in a CSG to LNG Joint Venture for up to A$9.6 billion 8 September 2008
Slide 2: 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 3: Agenda
Agenda • Highlights Mr Kevin McCann AM Chairman, Origin • Transaction Overview Mr Grant King Managing Director, Origin • ConocoPhillips Mr John Lowe Executive Vice President, Exploration and Production ConocoPhillips • Looking Forward Mr Grant King Managing Director, Origin 3
Slide 4: Highlights
Highlights • Origin selects ConocoPhillips to acquire a 50% share in a CSG to LNG Joint Venture for up to A$9.6 billion (1) Transaction: • Origin and ConocoPhillips to jointly develop up to a 4 train CSG to LNG project • Outstanding CSG 3P benchmark of up to A$1.88/GJ (2) • Substantial earnings upli
Slide 5: Transaction Overview
O origin Transaction Overview
Slide 6: Transaction Overview
Transaction Overview ConocoPhillips to subscribe for a 50% interest in Origin Energy CSG Limited Assets Includes all of Origin’s CSG interests, related production facilities and existing CSG sales contracts ConocoPhillips to invest up to A$9.6 billion for a 50% share of a CSG to LNG Joint Venture co
Slide 7: Transaction includes all of Origin's CSG reserves & resources
Transaction includes all of Origin’s CSG reserves & resources… The transaction also includes: • CSG-related production facilities • Origin’s conventional interests of 44 PJe in the Denison Trough • Existing CSG sales contracts to Origin and third parties Some of Origin’s CSG reserves and resources a
Slide 8: Transaction confirms increasing valuations for large scale, high quality CSG resources
Transaction confirms increasing valuations for large scale, high quality, well developed CSG resources capable of supporting multiple train LNG projects Trains 3 & 4 Additional Payments: A$1.2 billion Train 2 Additional Payment: A$0.6 billion Train 1 Additional Payment: A$0.6 billion Initial
Slide 9: Fully aligned transaction combining Origin's leading position in Australian CSG development
Fully aligned transaction that combines Origin’s leading position in Australian CSG development… Upstream LNG Plant LNG Marketing Domestic Gas Operator Origin ConocoPhillips Joint Venture Origin Ownership 50:50 50:50 50:50 50:50 Extent of All gas production LNG Plant into All domestic Joint marketin
Slide 10: Joint Venture will target first production in 2014
Joint Venture will target first production in 2014… Period Milestone • ConocoPhillips’ recent development of Darwin LNG on 2009 Commence FEED time and on budget demonstrates Late 2010 Train 1 FID that it is well placed to fast track 2010/11 Train 2 FID this development 2014 Train 1 First LNG • The C
Slide 11: The joint-venture aligns the interests of Origin and ConocoPhillips
The joint-venture aligns the interests of Origin and ConocoPhillips and leverages the strengths of each company Origin ConocoPhillips Outstanding Value: Transaction benchmark of up to Outstanding Value: Leverages ConocoPhillips’ A$1.88/GJ 3P reserves strengths and experience and establishes a long t
Slide 12: Financial Benefits & Capital Management
Financial Benefits & Capital Management
Slide 13: The transaction transforms the financial position of Origin
The transaction transforms the financial position of Origin and provides immediate benefit to Origin’s shareholders • This will result in an immediate and substantial increase in earnings for Origin from the interest benefit • Origin estimates the transaction will provide accretion to consensus unde
Slide 14: A$1.5 billion capital management program
Following completion of the transaction, Origin intends to undertake a A$1.5 billion capital management program • An immediate payment of an additional dividend of 25 cents per share fully franked to double the 2008 dividend (~A$225 million), providing a new base for future dividends • Commence an o
Slide 15: Independent Valuation
O origin Independent Valuation
Slide 16: The Independent Expert has valued Origin's shares at $28.55 to $30.71/share
The Independent Expert has valued Origin’s shares at $28.55 to $30.71/share • Grant Samuel has completed its independent valuation of Origin including the CSG transaction and has released the abbreviated findings in the letter included in the media release • Grant Samuel is currently finalising the
Slide 17: ConocoPhillips
O origin ConocoPhillips
Slide 18: ConocoPhillips 2007 Highlights
ConocoPhillips 2007 Highlights • Integrated, International Company Adjusted • Operations in nearly 40 countries Earnings1 • Annualized revenues of US$253 B / Assets of US$190 B $16.4 B • 33,100 employees • Headquartered in Houston, Texas • Diversified Portfolio of Legacy Assets Cash From • 2.3 MMBOE
Slide 19: ConocoPhillips' Leading Coal Seam Gas position
ConocoPhillips’ Leading Coal Seam Gas position • Over 25 years’ working experience in coal seam gas (CSG) • Current production and operations in San Juan and Uinta Basins (USA) and Horseshoe Canyon (Canada) • Largest producer and acreage holder in San Juan Basin • Conventional and CSG production (1.
Slide 20: ConocoPhillips' LNG Expertise
ConocoPhillips’ LNG Expertise • Over 39 years’ working experience in LNG • Equity portfolio • Kenai, Alaska • Darwin, Australia • QG3, Qatar (under construction) • Pioneer in LNG technology - ConocoPhillips Optimized CascadeSM Process • Licensed and/or operating in: • Alaska • Equatorial Guinea • Au
Slide 21: ConocoPhillips Australia
ConocoPhillips Australia • Offices in Perth, Darwin, Dili Timor-Leste • ~ 450 employees • Operator and majority interest holder in Bayu-Undan/DLNG • Approximately 107,000 bpd liquids • 500 km pipeline from Bayu-Undan to Darwin • Darwin LNG facility • Major interest in other Australia opportunities •
Slide 22: Darwin LNG Facility
Darwin LNG Facility • One of only two LNG facilities operating in Australia • Process • 650 MMCFD feedstock from Bayu-Undan • Nominal 3.5 MTPA LNG production • Low emission technology • Sales to Tokyo Electric and Tokyo Gas • Construction commenced June 2003 • Commissioned February 2006 • Basis for
Slide 23: Looking Forward
O origin Looking Forward
Slide 24: Transaction adds substantially to Origin's portfolio of existing developments
This transaction adds substantially to Origin’s already extensive portfolio of existing developments… … with the balance sheet strength to pursue a range of acquisitions and additional development opportunities 24
Slide 25: Completion of this transaction will transform Origin
Completion of this transaction will transform Origin, delivering immediate value to shareholders… • Origin selects ConocoPhillips to acquire a 50% share in a CSG to LNG Joint Venture for up to A$9.6 billion • Transaction provides immediate benefit to Origin’s shareholders: substantial earnings uplif
Slide 26: Further Information
Further Information Origin ConocoPhillips Angus Guthrie Gary Russell (Investors) 212-207-1996 Manager, Investor Relations Kristi DesJarlais (Media) 281-293-4595 Email: angus.guthrie@originenergy.com.au Bill Tanner (Media) 281-293-2801 Office: +61-2-8345 5558 Robin Antrobus (Australia Media) 61 8 942
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