Origin Energy Limited · ASX:ORG
Origin Energy — Non-Deal Roadshow (May 2007)
70 slides from Origin Energy's roadshow presentation, May 14, 2007
Slide 1: ASX announcement: Presentation & Sustainability Performance Summary
Origin energy To Company Announcements Office Facsimite 1300 300 021 Company Australian Stock Exchange Limited Date 14 May 2007 From Bill Hundy Pages 70 Subject PRESENTATION & SUSTAINABILITY PERFORMANCE SUMMARY Attached for your information is a presentation being made by Mr Grant King, Managing Dir
Slide 2: US Roadshow May 2007
US Roadshow May 2007 ecm iteccanenaibinnmnonescnmannnni tag Bienes comer
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: Financial objectives and business strategy
Origin’s financial objectives and business strategy have been established to respond to changes in the energy industry that began in the mid 1990s... « Financial Objective - Steady and predictable cashflows - EPS growth of 10-15% pa on average « Business Strategy - Positioned as a fuel integrated ge
Slide 5: Leading fuel integrated generator retailer in Australia and NZ
The effective implementation of these strategies has resulted in Origin becoming the leading fuel integrated generator retailer in the Australian and NZ markets... J 3,000 40 2P Reserves ce 35 | Customers 2,500 | {PJe} 3,500 ~ | (millions) Generation Capacity 3.0 2,000 3,009) (MW) 28 1,500 4 2,500 4
Slide 6: Total shareholder return since listing
Since listing Origin has delivered a total shareholder return (TSR) of 37.5%) per annum on a compound basis... 80 CFS i " » Free cash flow per share has grown at a CAGR 25% * as 7) since listing 2° a so » EPS has increased from 13 cents per share in 2000 to a « 1 2 ao 42 cents per share in 2006 2“ 1
Slide 7: Market capitalisation growth and sector peers
This performance has seen Origin increase its market capitalisation from around $700 million to over $7 billion... + S&P/ASX 200 Energy Index + S&P/ASX 200 Utilities Index Ticker | Company Name eine” Ticker | Company Name qtiltion™ Pp WPL Woodside Petrofeum 26,849 i” AAN Alinta 7,408 ORG: Origin Ene
Slide 8: Slide 8
Slide 9: Australian and New Zealand energy market size
The Australian and New Zealand energy market has end use sales of electricity, gas, and related products and services of over A$40 billion per annum Australian End Use Energy Sales A GROWING MARKET and Growth in GDP A GROWING COMPANY * Growth in domestic Energy Sales (PJe} SDP (%} » Revenues up 21%
Slide 10: Evolution of Australian energy markets since mid 1990s
The energy markets in Australia have evolved significantly from mid 1990s when they were regionally based... Electricity Market Dynamics * Limited (sw) interconnection of markets 3000MW So Snowy to NSW Gas Market Dynamics + Cooper and Gippsland dominated gas supply under tong term (30 year) contract
Slide 11: Interconnected electricity and gas markets by 2007
By 2007 the electricity and gas markets have become largely interconnected to form an integrated electricity and gas market in eastern Australia... Energy Retailing + An initial flurry of activity with new entrants from the US and Europe was followed by rapid consolidation as many entrants faiied to
Slide 12: Market volatility introduces risk
These markets now exhibit significant volatility which introduces risk to market participants Victorian Spot and Forward Contract Electricity Prices Dally spot market price (A843 6 Page 1t ¢ @ ¢ 8 $48 § § 33 Victorian gas daily spot price and demand 2005 and 2006 io oh chew 1.250.009 1.156.009 1.056
Slide 13: Deregulation, privatisation and industry consolidation
Over this time deregulation and privatisation has resulted in industry consolidation and business integration being the dominant drivers of activity in the energy sector... QLDVICISA Energy Market Qvmership Evolution* 1995 +556 1997 1998 1999 2000 2061 2002 2003 2008 200s 2006 207 if Soe GaMaehoieat
Slide 14: Description of Existing Business
n ner Description of Existing Business
Slide 15: Retail business growth through acquisitions
Through acquisitions Origin has grown its retail business and secured a leading channel to market Eastern Australia 40 Share of gas and electricity accounts 3.5 | Customers a0 | (millions) Country , 7% Origin, 23% 25 Integral , 7% 2.0 4 15 1o4 Energy Australia, oa Red, VEPL, Jack, “ee Jun Jun Jun Ju
Slide 16: Generation interests in Australia and New Zealand
Origin currently has interests in 870 MW of baseload and peaking generation in Australia and over 2,200 MW through Contact Energy in New Zealand Australia Plants Capacity (MW) Operation | Fuet Osborne 186 (Cogen} Base Gas Seecaecal if Worsley 126 (Cogen} Base Gas Cont sara gas pnrastea Suiwer fsiand
Slide 17: Wholesale contracts and electricity purchasing position
When acquiring the retail businesses in Australia Origin also acquired wholesale contracts that supplied the majority of Origin’s electricity purchasing requirements at a time of historically low electricity prices 3,500 Generation Capacity =) (AW) 2.500 ° Energy Demand Peak Demand 2.080 c 35 =. . 7
Slide 18: Finding and developing gas close to markets
For many years Origin has been focused on finding and developing gas close to markets... 3,000 2,500 2,000 1,500 4,000 CSG developments Pertts “ Basin New BassGas | zeotend Otway Gas ™ | Project Project .. and has significantly increased its reserves 2P Reserves (PJe} Jun Jun Jun Jun Jun Jun Jun 06
Slide 19: Reserves approximately 90% natural gas
Approximately 90% of Origin’s reserves are natural gas, with production growing quickly as new projects come on line... 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 Pro
Slide 20: Around 1,400 PJ of 2P CSG reserves
Origin currently carries around 1,400 PJ of 2P CSG reserves and is likely to book significant additional reserves over the next few years : y CSG Reserves . CSG Production = ao m 15 12 2P Reserves (PJ} Annual Production {PJ} 2000 2001 2002 2003 2004 2005 2006 2007* 2000 2001 2002 2003 2004 2005 2006
Slide 21: Gas supply for retail business
Gas for Origin’s retail business has historically been supplied from contracts with third parties Origin Energy - Gas Retail Contractual Position (FY 2007) + Origin’s Retail division sells 120 to 127 PJ of gas per annum 160 * Origin procures gas to service its Retail operations from a variety of sou
Slide 22: Financial Review
drig Financial Review
Slide 23: Reporting segments
Origin has reported its business across four segments covering its operations in Australia with Origin’s 51.4% interest in Contact being reported as a fifth segment EBITDA | Fett Retail : +Over 3 million customers, Australia’s 2" targest energy retailer 273 1,229 «National business covering electric
Slide 24: Profit & Loss
Profit & Loss Page 23 Jun 01 Jun02 Jun03 Jun04 Jun05 Jun 06 (sm) Gm) Sm) Sm) Sm) Sm) Revenue 1,679 2,429 3,352 3,556 4,902 5,950 EBITDA 305 405 491 532 918 1,087 EBIT 173 231-295-329 65679 Net Financing Cost!) (32) (43) (49) (45) (148) | (167) Tax expense (38) (54) (80) (77) (137) | (169). Minority
Slide 25: Capital expenditure on growth and acquisitions
Origin’s growth has required significant capital expenditure. Acquisitions in the Retail and Generation areas and Contact Energy providing immediate contributions... Jun01 Jun02 Jun03 Jun04 JunO05 Jun 06 (sm) ($m) ($m) (Sm) (Sm) Gm) Growth & Acquisitions E&P 56 129 179 313 335 600 Retail 344 78 154
Slide 26: Cash flow measures of performance
Origin uses cash flow measures as the primary measure of performance within the business... Jun01 Jun02 Jun03 Jun04 Jun05 Jun 06 ($m) ($m) ($m) ($m) ($m) ($m) EBITDA 305 405 491 532 918 1,087 Non-cash items‘) (8) (17) 13 2 4 (10) Change in Working 11 16 39 (48) (31) 16 : Capital Stay in business CAP
Slide 27: Conservatively geared balance sheet
This has allowed Origin to maintain a conservatively geared balance sheet and take on the extra debt to fund ongoing investment in growth Jun 01 Jun02 Jun03 Jun04 Jun05 Jun 06 Net debt ($m) 727 633. 732 «861 =. 2,743 2411 Total equity ($m) 1,328 1,626 1,790 1,939 3,519 3,646 Adjusted Debt / (debt +
Slide 28: Growth Opportunities
JIE Growth Opportunities
Slide 29: East coast market accessible to retailers
Once FRC for gas and electricity is introduced in Queensland in July 2007, the entire east coast energy market of approximately 12 million accounts is accessible to retailers Eastern Austratia Market share customers: 2007 400.082 Green Power Customers in Australia ‘380.000 Market 300.0004 onset 286.
Slide 30: Retail business opportunity for generation growth
Origin’s electricity retail business provides a substantial opportunity for growth in generation Energy Demand Peak Demand we a ye o a Peak Demand and Installed capacity (MW) Annual Demand and Generation dispatched (Twh) o i Grigin Retail Load Ml Origin Existing Generation @ Permitted Sites Developm
Slide 31: Generation expansion investment in Australia and New Zealand
These expansion opportunities would require investment of approximately $3 billion in Australia and $2 billion in New Zealand Australia Plants Fuel Scale Indicative gross cost Status {and Origin equity%} Quarantine Power Station expans’n | Gas 120 MW $0.08 billion (100%) Under Construction Darling D
Slide 32: Opportunity to increase gas production
Origin’s gas retail business together with planned growth in generation provides a major opportunity to increase gas production... ToP to ACG 250 tag Buy from Origins 2 Buy from Origin JV partners MME Buy from Id parties veces Dower Generation m ee SUSE 200 Rem es Power generation - potential for Or
Slide 33: Major expansion in CSG production
Origin is currently investing in a major expansion in CSG production... + Since 2002 major CSG based contracts have been signed with: - AGL (340 PJ over 15 years commenced June 2005 - Origin net share approx 52%) - QAL (180 PJ over 15 years commenced Sept 2006} - Incitec Pivot (70 PJ over 16 years c
Slide 34: Offshore projects: BassGas and Otway
Capex on major offshore projects is now largely complete with BassGas commencing production... BassGas Project (42.5%) + Commenced production in June and completed commissioning in September + A419 day shutdown of the BassGas Plant in late February / early March lifted sales gas production to 60-65
Slide 35: Kupe project progress
The Kupe project is progressing with production expected in mid 2009 LEGEND (ZA | origin permit PS ot Gas pipeline "+. Potentiat gas pipeline Gas fieid OH fleid Northland Basin > Tasman Sea Taranaki Basin PML 38146 KUPE Kupe Gas Project (50%) Fabrication of the platform jacket in Thailand is near co
Slide 36: Upstream projects capex
Origin’s upstream projects comprise a capex spend of approximately $1.3 billion and have only just begun to contribute to earnings in the current financial year Origin Energy Projects Scale Indicative gross cost {and Origin equity%) Status BassGas Project 20 PJ/a plus liquids $0.75 billion (42.5%) i
Slide 37: Reserves growth through exploration
As production increases Origin will drive continued growth in reserves through exploration in the Otway and Bass basins, CSG development in Queensland, the Taranaki and Canterbury basins in New Zealand and prospective acreage in east Africa it is expected that these areas will provide major opportun
Slide 38: Advocacy on climate change and carbon regime
Over many years Origin has taken an advocacy role in the debate surrounding climate change and a carbon regime... ‘ Researching CO2 ae x SolerCity Cc sequestration technologies aye meses AFL. . The Business Case Carbon Neutral tor Early Action by 2009 Austratisn Burioess Roundtabis on Climate Change
Slide 39: Investing in low carbon emission technologies
Origin is investing in low carbon emission technologies to meet future energy needs Solar ¢ $30m investment in a solar photovoltaic SLIVER project * Produced 75 and 150 watt SLIVER modules + Seeking partnership to accelerate the large-scale production of SLIVER technology Geothermal + 14.3% investme
Slide 40: Potential investment in growth projects
These projects potentially represent up to $5 billion of investment for Origin and $2 billion for Contact Capital expenditure (A$, million} 800 Origin Energy potential capital expenditure profile on growth projects 700 FY 06 free 600 5 500 4 400 I FY 05 free t cash flow AS448 million cash flow AS583
Slide 41: Leading position as fuel integrated generator retailer
Origin has secured the leading position as a fuel integrated generator retailer across Australian and New Zealand markets 4 2P Reserves 2,500 | {PJe) Jun Jun Jun Jun Jun Jun Jun CO G1 G2 O38 04 G5 06 Page 40 Generation Capacity (MW) RH Contact Jun Jun Jun Jun Jun Jun Jun 00 61 82 03 64 G5 06 § Custo
Slide 42: Continuing integration of Origin's business
The continuing integration of Origin’s business is increasingly evident... Energy Demand Peak Demand & 8 sy 8 8 ‘Origin Retail Natural Gas Supplies (PS) 3 Peak Demand and installed capacity (AW) o Annual Demand and Generation dispatched (Twh} ° El Origin Retait Load Il Origin Generation Bl Permitted
Slide 43: Slide 43
Slide 44: 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
Slide 45: Sustainability Performance Summary 2006
oF oy Ce ee De yo ill a oy Ne “Sustainability = Performance Summary 2006 = : . Origin ME
Slide 46: Contents
Contents Performance Summary 2005-2006 Performance Summary ~ Actions: eo Environment _ Social WW Economic Key Performance Data 1 Environment Social UW ‘Econamic.. Directory .. 25 25 abieyt
Slide 47: Performance Summary 2005-2006
Performance Summary 2005-2006 ‘Asa leading Australasian energy company we impact 0 on, and interact with, | ‘many sta keholders across Australia, New Zealand and the Pacific. In each decision we make we.ba lance the needs cf our stakeholders - ~ensuring we continue to be a. well-managed company that
Slide 48: Performance Summary 2005-2006
Performance Summary 2005-2006 We also measure total emissions across our supply chain and during 2005/06, emission Intensity decreased two percent to.120 kilotonnes. of carbon dioxide per petajoule equivalent Total emissions, across cur supply chain, decreased two percent to 32.1 million kilotonnes
Slide 49: Performance Summary 2005-2006
Performance Summary 2005-2006 HE Our people. We.continue to. concentrate on attracting and retail ning the best people ina highly competitive employment market. Origin. Energy employs more than 3,400. people across. Australia, New Zealand and_the Pacific, an eight percent increase on 2004/05. : ‘We
Slide 50: Performance Summary 2005-2006
Performance Summary 2005-2006 in September 2006, we formed a two-year partnership with the Queensland Fire and Rescue Service ~ to promote bushfire preparedness across Queensland, supporting this initiative with $120,000. Origin Energy’s Home Energy Project is a classroom energy efficiency program f
Slide 51: Performance Summary — Actions
Performance Summary — Actions @ Achieved @in progress @ Not achieved Objective: To measure and accurately report the company’s greenhouse gas emissions naps improve the company’s Work with our joint-venture partners to agree greenhouse gas on consistent greenhouse gas inventory We are working throug
Slide 52: Performance Summary — Actions
Performance Summary — Actions @ Achieved @in progress @ Not achieved Objective: To measure and accurately report the company’s greenhouse gas emissions (continued) Seek economic alternatives for reducing greenhouse gas emissions. Finalise conversion of the Ladbroke Grove Power Station to operate on
Slide 53: Performance Summary — Actions
Performance Summary — Actions Objective @ Achieved Gin progress @ Not achieved fo reduce the greenhouse gas intensity of our customers’ energy consumption Provide a range of competitively priced, clean- energy products and services ‘that allows customers ‘to choose their level of greenhouse gas inte
Slide 54: Performance Summary — Actions
Performance Summary — Actions Objectiv @ Achieved @in progress @ Not achieved ‘o reduce the greenhouse gas intensity of our customers’ energy consumption (continued) Provide a range of competitively priced, clean- energy products and services that allows customers to choose their level of greenhouse
Slide 55: Performance Summary — Actions
Performance Summary — Actions @ Achieved @in progress @ Not achieved Objective: To reduce the greenhouse gas intensity of our customers” energy consumption (continued) Provide information for our customers so they can measure and reduce the carbon intensity associated with their energy use. Reduce c
Slide 56: Performance Summary — Actions
Performance Summary — Actions @ Achieved @in progress @ Not achieved Objective: To take all reasonable steps to eliminate or minimise any adverse impact that our activities have on the environment Ensure all environmental impacts are appropriately assessed, and all environmental approvals are obtain
Slide 57: Performance Summary — Actions
Performance Summary — Actions @Achieved @in progress @ Not achieved Objective: To take all reasonable steps to eliminate or minimise any adverse impact that our activities have on the environment (continued) After use, ensure land is managed and/or rehabilitated to appropriate environmental standard
Slide 58: Performance Summary — Actions
Performance Summary — Actions Retain and develop key talent. _ identify a framework for retaining and developing key talent. @ Achieved in progress @ Not achieved During June 2006, we developed processes, templates and guidelines for conducting peoole reviews to provide a framework for identifying,
Slide 59: Performance Summary — Actions
Performance Summary — Actions @ Achieved @in progress @ Not achieved Objective: To provide and maintain a satisfying and rewarding working enviranment for all employees (continued) Bats Develop an organisational Conduct a culture survey to assist in 6 We conducted an employee survey in January 2006,
Slide 60: Performance Summary — Actions
Performance Summary — Actions @ Achieved @in progress @ Not achieved Objective: To provide and maintain a satisfying and rewarding working environment for all employees (continued) “ i — al Encourage and support employee participation in community-based activities that form part of ‘the company’s co
Slide 61: Performance Summary — Actions
Performance Summary ~— Actions @ Achieved @in progress @ Not achieved Objective: To eliminate or manage hazards and practices in our business that could cause accident, injury or illness to people, damage to property, or unacceptable impacts on the environment ~~ : : . i . Ml Continuously improve Co
Slide 62: Performance Summary — Actions
Performance Summary — Actions @ Achieved @in progress @ Not achieved Objective: To maintain community support and goodwill for company’s activities Maintain an open and constructive approach to gaining access to land and resources. Partner with organisations demonstrating a like-minded approach to s
Slide 63: Performance Summary — Actions
Performance Summary ~ Actions @ Achieved @in progress @ Not achieved Objective: To maintain. community support and goodwill for company’s activities (continued) Maximise the value of company sponsorship to recipients by focusing on activities that most leverage Origin Energy’s skills and resources.
Slide 64: Performance Summary — Actions
Performance Summary — Actions @ Achieved @in progress @ Not achieved Objective: To maintain community support. and goodwill for company’s activities (continued) identify and participate in public debates where we make a relevant and meaningful contribution. Continue to pursue climate change programs
Slide 65: Performance Summary — Actions
Performance Summary ~ Actions @ Achieved @in progress @ Not achieved Objective: To provide sustainable returns to Origin Energy's key economic stakeholders Provide shareholder returns in the ‘top third of comparable companies. Achieve an operating cash flow after tax ratio of greater than 9.4 percen
Slide 66: Key Performance data — Environment
Key Performance data — Environment Greenhouse gas emissions ~ Origin Energy supply chain (MtCO,e)° 2, Transmission and distribution 3. Consumption Natural gas, LPG and other products produced 3.3 Mt Gas purchased . 1.5 Mt Gas transported Natural gas ‘and distributed ad LPG 24a Mt : 20 Mt Efectricity
Slide 67: Key Performance data — Environment
Key Performance data ~ Environment Operated generation plants - Operated generation plants - Operated generation plants - Operated exploration and NO, emissions SO, emissions Consumed water production ~ Consumed water Kifograms/year Kilograms/year *” Megsitres/year Megstitres/year 800,000 25 400 ra
Slide 68: Key Performance data — Environment
Key Performance data — Environment Operated exploration and production facilities - SO, emissions 2500 2.090 1900 1,090 Spo 4 . sens 2002 ‘Mouia "Peat "Surat ~~ Tanga Xatnock ~Dehaves _dingersla Tubridg ”Weybesbury BaceCas Wella "am 2604 Spuings Plant Ptatiown mmm 2605 reas 2606 Operated exploration
Slide 69: Key Performance data — Social
Key Performance data — Social Disconnections... Community investment oe Employees by region . Millions 2f datlars Nuinbers of Numbers of, 2,000 20,000 "L900 25,000 : . 800, 4,000 . : 600 2.0000 400, 500, 5,009 . 200. sit 2001 — om ~ a a roiship, Government Employee Consultation Harlhip #2 "Pacific,
Slide 70: Key Performance data — Economic
Key Performance data — Economic Distribution of Capital providers ©.”.. Employee wages Government and gross value added ‘tons OF aollars~ and salaries”... community 2006 2006 Millions of doliars* Millions of doliers* Millions of éollers* Gtoss value added? 000 Value distribution $000 % +008 500 Be o