Origin Energy Limited · ASX:ORG
Origin Energy — UBS Resources Conference 2004
27 slides from Origin Energy's conference presentation, Jun 29, 2004
Slide 1: Origin Energy ASX announcement cover note
Origin energy To Company Announcements Office Facsimite 1300 300 021 Company Australian Stock Exchange Limited Date 29 June 2004 From Bill Hundy Pages 27 Subject PRESENTATION TO UBS RESOURCES CONFERENCE Piease find attached a copy of a presentation that Grant King, Managing Director is delivering to
Slide 2: Strategic framework for Origin Energy's resource based projects
Strategic framework for Origin Energy’s resource based projects UBS Resources Conference Ee pacer re es June 2004
Slide 3: Origin began developing financial objectives and business strategies in the mid 90s
Origin began developing financial objectives and business strategies to respond to changes in the energy industry in 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 than regulat
Slide 4: The 2003 ABARE supply/demand forecast has again raised expectations
The 2003 ABARE supply/demand forecast has again raised expectations for increases in domestic consumption...... ABARE forecasts of Australian domestic gas consumption Comparison of ABARE 2004 and 2003 forecasts (petajoules per annum) for year 2009/10 1756 — 2003 : Exports swiffer 2001 : Electricity
Slide 5: Origin's supply/demand analysis for eastern Australia in 2001
4 Origin’s supply / demand analysis for eastern Australia in 2001 showed large uncontracted demand creating perceived weenes shortfall in local supply Eastern Australian gas demand Origin Energy estimates 2001 Eastern Australian gas demand Origin Energy estimates 2004 [= Uncontracted +) ME Total Con
Slide 6: Upstream industry has committed over $3 billion to new developments
Origin estimates the upstream industry has committed over $3 billion to new developments to supply these contracts... ’ Patricia/Baleen (producing) Bream gas-cap development (producing) Otway Basin onshore discoveries (producing) ‘ BassGas (under construction) ’ Minerva (under construction) CSG fiei
Slide 7: Installed capacity lets eastern Australian basins supply local markets
With this installed capacity eastern Australian basins are capable of supplying local markets for years to come.......... Gas Reserves | Cooper | Gipps- | Bass / Coal | Totals | Reserves | Table compiled from (PJ) (000) Basin & land Otway | Seam cover# | ABARE and Geoscience Qid Basin Gas (years) |
Slide 8: Acreage awards, seismic recorded and wells drilled provide lead indicators
Acreage awards, seismic recorded and wells drilled provide lead indicators that industry expects more discoveries in central and south eastern Australia Award of offshore acreage - southern Australia 40 @ Other southern basins 8 + EXGippstand Basin Otway Basin Permits awarded per year 1999 2000 = 20
Slide 9: Getting gas supplies to market has become easier with new pipelines
Getting gas supplies to market has also become easier with over 6,500 kms of transmission pipelines added in eastern Australia* since 1995........ tne et Se om Darwin « Producers can increasingly target large volume customers for producer-direct sales « Increased choice shortens customers contractin
Slide 10: Electricity industry has responded by adding interconnectors and generation
apes= Future interconnector: ——" ldentified potential 9 The electricity industry has responded to similar challenges by adding more interconnectors and investing in new generation, increasing reliability and price convergence 1050MW QLD 3000MW SA Snowy to NSW Regulated interconnector , S0OMW Entrepr
Slide 11: Electricity market remains in a position of oversupply
Origin believes the electricity market remains ina position of oversupply that will last many years......... . 45,006 Generation capacity and demand (MW) Electricity supply and demand in the NEM* e-———— Area of potential shortfall in 2010 EZ] Renewabies Ma Coa! 2 Gas - Int yoni Hydro EEE] Mothballed
Slide 12: New gas fired generation has been used predominantly for peaking
1 New gas fired generation has been used predominantly for peaking and has created modest additional gas load.... New gas generation plant installed (MW) Gas Turbine El Combined Cycle Cum. new gas fired generation capacity (MW) 8 8 2002 [Potentiat gas usage in Power Generation EEE Coai base-load ena
Slide 13: Gas can only compete at base-load with a large discount
Gas can only compete at base-load with a large discount to current delivered gas prices..... Comparison of LRMC for new generation - coal vs combined cycle gas turbine $48 $46 $44 LRMC of generation /MWhr) $42 $40 4 Brown coal Black coal CCGT @ CCGT @ $3.50/G) $2.10/ GS Source: Basic data from ACIL
Slide 14: Implications for industry from this strategic framework
Implications for industry from this strategic framework « Gas pricing will be set by the marginal producer until eastern Australian resources deplete - likely to be 15 years + in Origin’s view « Customers contracting time-frames will shorten as supply diversifies, increasing take-or-pay risk for ret
Slide 15: Implications for Origin from this strategic framework
14 Implications for Origin from this strategic framework « Maintain retail margins and market share on a national basis « Add extra resources through exploration near existing and new producing infrastructure (Otway, Bass, CSG, Perth Basin gas) « Seek growth opportunities in generation where Origin’
Slide 16: Retailers have responded by changing their risk profile
Retailers have responded to this framework by changing their risk profile through diversifying their business Gas utilities 1995 Energy retailers 2003 Retailer Customers | Gas fired Retailer Customers | Gas fired (millions) gen. (millions) gen. Gas | Elect. | (4W)" Gas | Elect.| (MW) Gascor 1.3 - AG
Slide 17: Origin's upstream strategy also reflects this framework
16 Origin’s upstream strategy also reflects this framework ..... Strategic Drivers + Geographic focus + Gas focus + Look for gas where it is easy to market - not just easy to find + Leverage organisations skills and knowledge base + Seek opportunities that bring synergies to other areas of the busin
Slide 18: BassGas project continues towards first gas
17 The BassGas project continues towards first gas in the September quarter with development drilling commenced « Project operated by Origin « Project will supply: - 20PJ natural gas per year - 10% of Victoria’s gas supply for 15 years - 80,000 tonnes of LPG per year - 1 million barrels of condensat
Slide 19: Offshore Otway Basin development
18 Offshore Otway Basin development « Thylacine & Geographe fields discovered in May 2001 * $1.1 bn staged development approved in early May 04, Woodside Petroleum Limited will be the operator « 2P gas reserves of over 880 PJ gross plus condensate and LPG « Annual Production - 60PJ natural gas per y
Slide 20: Otway and Bass basins: applying technology to prospect identification
19 in the Otway and Bass basins Origin is systematically applying appropriate technology to improve prospect identification and risk assessment to follow-up the initial field developments The Antares 3D seismic survey recorded in Vic/P37 (V) has developed a number of prospects in shallow water close
Slide 21: Perth Basin development of oil production capabilities
in the Perth Basin the successful development of oil production capabilities has continued............ . e L1/L2 area: Development of the Hovea and Eremia fields has continued - water injection expanded on Hovea - Eremia field being connected to Hovea facilities - Water handling facilities at Hovea
Slide 22: New play ideas and 3D seismic providing high success rates
New play ideas and application of 3D seismic is providing high success rates and significant follow-up targets YK \e 4 2 + 73% success rate from recent \ \ a. wells (8 discoveries from 11 \ 2 exploration wells since late \ 2001} \ - 3 oil discoveries (Hovea, \ Erernia, Jingemia) - 5 gas discoveries
Slide 23: Petroleum leases over Spring Gully CSG resource approved
Petroleum leases over the Spring Gully CSG resource have now been approved and EMP has been submitted..... « Engineering work 56 % complete & all long lead time items ordered. Development on track for mid 2005 production start-up » Licenses and EMP’s for the pipeline from Spring Gully to Wallumbilla
Slide 24: Other producers booking reserves as Surat/Bowen basin re-emerges
A number of other producers are also booking reserves as the Surat /Bowen basin re-emerges as a major source of gas ¢ Origin has existing CSG production or pilot projects at - Fairview — - Spring Gully - Peat - Dawson Valley - Mungi - Talinga - Harcourt — - Lilyvale (in planning} with gross 2P reser
Slide 25: Kupe gas field FEED contract awarded
Kupe gas field FEED contract awarded to Worley and development planning progressing to schedule......... 24 « Origin 50% interest holder and operator, all gas contracted to Genesis * Gross reserves of approx 340 PJe including 236 PJ of sales gas plus liquids. Expected production 20 PJ of sales gas a
Slide 26: Developing renewable energy options in solar and geothermal
25 Origin is continuing to develop renewable energy options, particularly in solar and geothermal (HDR) applications....... Solar - photovoltaic Sliver ® cells « Construction of $20 million demonstration plant in Adelaide complete ¢ Qualifying process and manufacturing of test product will take plac
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