BG's takeover offer for Origin Energy 24 June 2008
BGs takeover offer for Origin Energy Introduction & purpose Outline the terms of BGs offer Explain why BGs cash offer of 15.50/share represents full and fair value Set out why BGs proposal, previously supported by the Origin…
BGs takeover offer for Origin Energy Key Messages BGs views can be summarised: BGs cash offer of 15.50/share represents full and fair value BGs offer has valued Origin at a premium to relevant indices Origins suggestion of 16bn for…
BGs takeover offer for Origin Energy BG offer highlights All cash offer of 15.50/share less any dividend Full and fair value for whole business (retail, generation, E&P) BG intends to invest in and grow all of Origins Australian…
BGs takeover offer for Origin Energy Offer represents a substantial premium 72% 59% 53% 48% 15.50 9.04 9.72 10.12 10.47 BG offer 3 month VWAP* 1 month VWAP* 1 week VWAP* Last Traded Price of Shares1 Source: IRESS…
BGs takeover offer for Origin Energy Offer represents substantial value At BGs offer price, Origin is valued at 31.4x FY2008 earnings, representing substantial value relative to relevant indices BGs Offer attributes significant value…
BGs takeover offer for Origin Energy Conditions include A minimum acceptance of 50.1% Necessary clearances and approvals including: FIRB ACCC OIO in New Zealand No material acquisitions or disposals by Origin BG Group…
BGs takeover offer for Origin Energy BGs proposal to Origin On 28 May 2008, Origin agreed that a revised BG proposal at 15.50 per share should be put to Origin shareholders Origin then withdrew support citing: Santos-Petronas…
BGs takeover offer for Origin Energy Santos-Petronas deal is inappropriate benchmark Origin promotes a headline price of 1.65/GJ This is inappropriate because: Transaction included reserves (c 5500PJ gross) and value for a well…
BGs takeover offer for Origin Energy Arrow-Shell deal benchmark more appropriate Arrow-Shell transaction provides a more appropriate guide for the value of pure domestic CSG reserves Shell paid 435 million for a direct interest in…
BGs takeover offer for Origin Energy BGs proposal to Origin On 28 May 2008, Origin agreed that a revised BG proposal at 15.50 per share should be put to Origin shareholders Origin then withdrew support citing: Santos-Petronas…
BGs takeover offer for Origin Energy CSG reserves growth 2P reserves (PJ) Reserves as at May 15, 2008 5000 5000 May 15 report Reserves (PJ) Increase from 1st Jul 2007 4500 1P 1,330 223 PJ +20% Post BG offer 4000 4000 2P 4,715…
BGs takeover offer for Origin Energy Implied 3P reserves added per E&A well QGC ORIGIN 3P Reserve Adds 4,162PJ 5,544PJ Net wells 31.8 18.6 Reserves added per well 131PJ 299PJ Reserves added per operated well 131PJ 530PJ *…
BGs takeover offer for Origin Energy Competitors drilling density Origins drilling density is significantly lower than its peers 1 < 20,000 0.8 25,000 Wells per 20,000 acres Acres per well 0.5 40,000 0.2 100,000…
BGs takeover offer for Origin Energy Reversion rights Derived from acquisition by Origin in 2002 Reversionary interest is 45% of the interest acquired in certain tenements Costs being carried now and no payment to Origin on…
BGs takeover offer for Origin Energy Summary on reserves BG has concluded that: 70% of reserves added due to changes in estimating methodology Insufficient wells drilled to support reserves step-change Significant reserve increase…
BGs takeover offer for Origin Energy The JV alternatives Origin is attempting to create an export JV, involving sale of upstream assets Origin lacks existing LNG scheme, down the queue at Gladstone Highly capital intensive, very…
BGs takeover offer for Origin Energy Reserves for the JV alternatives Today, Origin has insufficient reserves for an LNG scheme Origin must first satisfy its domestic needs which BG estimates at more than 3000PJ from CSG Selling…
BGs takeover offer for Origin Energy Project implementation Commercialising Origins reserves involves significant project risk Implementing large scale projects is not straightforward Major uncertainties: cost growth and schedule…
BGs takeover offer for Origin Energy Markets Access and speed to market will be crucial to realising value Significant supply-demand balance uncertainties Significant pricing and economic uncertainties CSG is an unproven supply…
BGs takeover offer for Origin Energy Key Messages BGs views can be summarised: BGs cash offer of 15.50/share represents full and fair value BGs offer has valued Origin at a premium to relevant indices Origins suggestion of 16bn for…
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