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2H 2019 Results – Origin Energy Ltd.

Origin Energy Ltd. · Feb 20, 2020 · 52 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. 2H 2019 Results – Origin Energy Ltd. – slide 1
    Origin Energy 2020 Half Year Results Half year ended 31 December 2019 Frank Calabria, CEO & Lawrie Tremaine, CFO 20 February 2020
  2. 2H 2019 Results – Origin Energy Ltd. – slide 2
    Outline 1. Performance Highlights - Frank Calabria 2. Financial Review - Lawrie Tremaine 3. Operational Review - Frank Calabria 4. Outlook - Frank Calabria 2 20 February 2020 2020 Half Year Results Announcement
  3. 2H 2019 Results – Origin Energy Ltd. – slide 3
    Performance Highlights Frank Calabria, CEO 3 20 February 2020 2020 Half Year Results Announcement
  4. 2H 2019 Results – Origin Energy Ltd. – slide 4
    HY2020 financial highlights Statutory Profit Underlying Profit Underlying ROCE 12 month rolling 599 528 8.3% million million (34.0 cps) (30.0 cps) 25% decrease including lower net gain 11% decrease: introduction of regulated…
  5. 2H 2019 Results – Origin Energy Ltd. – slide 5
    Strong operational performance in HY2020 Integrated Gas Energy Markets Record half year production - improved upstream Unplanned generation outages detracted from an field and facility performance otherwise strong operational…
  6. 2H 2019 Results – Origin Energy Ltd. – slide 6
    We are committed to delivering for our stakeholders Transforming customer Committed to safety and Caring about our impact diversity experience Strategic NPS Regional procurement spend as a TRIFR rolling 12 months % of total spend 5…
  7. 2H 2019 Results – Origin Energy Ltd. – slide 7
    We are driven by our Purpose of Getting energy right for our Customers for our Communities for the Planet Moving to a simpler, digitised 200 million direct and indirect 1.5C scenario analysis published customer experience regional…
  8. 2H 2019 Results – Origin Energy Ltd. – slide 8
    We operate in a rapidly changing energy market NEM forward prices declining Renewables impacting intra-day volatility Gas prices declining (NSW /MWh) (Average NEM demand July- Sep (GWh) (A/GJ) 30 14 130 120 28 12 110 26 10…
  9. 2H 2019 Results – Origin Energy Ltd. – slide 9
    Executing our strategy to deliver value in a changing energy market Executing a clear strategy Building a track record Positioned for growth Energy Markets 100m retail cost out on-track, planning next wave of transformation…
  10. 2H 2019 Results – Origin Energy Ltd. – slide 10
    Operational performance driving returns for shareholders in FY2020 APLNG targeting in FY2020: Improved production at upper end of 690-710 PJ range Lower distribution breakeven at US29-US321/boe, including US8/boe project finance…
  11. 2H 2019 Results – Origin Energy Ltd. – slide 11
    Financial Review Lawrie Tremaine, CFO 11 20 February 2020 2020 Half Year Results Announcement
  12. 2H 2019 Results – Origin Energy Ltd. – slide 12
    HY2020 financial highlights Statutory Profit Underlying Profit Underlying EBITDA 796M 592M 1,727M 1,590M 528M 45.3 cps 599M 33.7 cps 34.0 cps 30.0 cps HY19 HY20 HY19 HY20 HY19 HY20 Energy Markets Integrated Gas…
  13. 2H 2019 Results – Origin Energy Ltd. – slide 13
    Accounting changes adopted from 1 July 2019 AASB 16 Leases APLNG dewatering and workover costs: Adopted from 1 July 2019, prospectively Change in treatment from 1 July 2019, prospectively Lease liability and corresponding right-of-use…
  14. 2H 2019 Results – Origin Energy Ltd. – slide 14
    Underlying Profit decreased 11% Movements in Underlying Profit (m) 15 (14) (129) 52 (47) 7 51 592 528 Primarily Higher Primarily Lower Includes lower production & impact of commodity Mortlake self electricity LNG sales…
  15. 2H 2019 Results – Origin Energy Ltd. – slide 15
    Energy Markets Underlying EBITDA down 15% Movements in Underlying EBITDA (m) Electricity gross profit down 170 million or 24% to 549 million: Regulation: VDO/DMO price impact (-55 million) (170) (15) 40 16 One off unplanned outages:…
  16. 2H 2019 Results – Origin Energy Ltd. – slide 16
    Integrated Gas Underlying EBITDA up 7%, excl. accounting change Movements Underlying EBITDA (m) (36) (59) 25 15 (20) 81 Share of APLNG Share of APLNG Integrated Impact of accounting EBITDA growth Gas - Other 900 changes (-56…
  17. 2H 2019 Results – Origin Energy Ltd. – slide 17
    Free cash flow up 22% on APLNG performance (m) HY20 HY19 Change Operating cashflow down 37% to 351 million Cash from operating activities 351 553 (202) Underlying EBITDA (-137 million) Distributions from APLNG 520 393 127 Tax…
  18. 2H 2019 Results – Origin Energy Ltd. – slide 18
    FY2020 capex driven by generation maintenance and Beetaloo Capex (m) 600 Majority of FY2020 generation sustain spend occurred in HY2020 (Mortlake repairs, Eraring maintenance, major overhaul at Uranquinty) 500 Other sustain…
  19. 2H 2019 Results – Origin Energy Ltd. – slide 19
    APLNG cash flow increasing, oil & LNG hedging/trading costs reducing APLNG estimated distribution and Origin oil/LNG hedging and trading (Am) 981m 1,400 Actual Estimated Range Estimated FY2020 APLNG cash distribution to Origin of…
  20. 2H 2019 Results – Origin Energy Ltd. – slide 20
    Proportionate free cash flow and returns Proportionate Free Cash Flow and Yield1 Underlying ROCE 2,500 15% 13.6% 12.2% 2,000 10.2% 10% 9.1% 1,500 7.7% 8.4% 8.2% 8.3% 1,000 5% 500 4.1% - 0% FY18 FY19 CY19 FY18 FY19 CY19…
  21. 2H 2019 Results – Origin Energy Ltd. – slide 21
    Continuing to optimise debt book for cost and tenor Debt maturity profile - excluding lease liabilities (Ab) Adjusted Net Debt / Adjusted Underlying EBITDA 2.7x (2.5x excluding impact of lease accounting change) 2.5 Active…
  22. 2H 2019 Results – Origin Energy Ltd. – slide 22
    Operational Review Frank Calabria, CEO 22 20 February 2020 2020 Half Year Results Announcement
  23. 2H 2019 Results – Origin Energy Ltd. – slide 23
    Energy Markets 23 20 February 2020 2020 Half Year Results Announcement
  24. 2H 2019 Results – Origin Energy Ltd. – slide 24
    Lower sales volume, stable generation Electricity sources and uses (TWh) Natural Gas sales (PJ) 20 Short Position Generation Losses Generation 15 Swap Contracts Other Business Business - Gas Wholesale Business - 10…
  25. 2H 2019 Results – Origin Energy Ltd. – slide 25
    Mortlake back in service, peak capacity improvements installed Unit outage One of the two units at Mortlake was damaged by an electrical fault on 8 July 2019 and was repaired and returned to service on 24 December 2019 Improvements…
  26. 2H 2019 Results – Origin Energy Ltd. – slide 26
    Strong gas supply position benefiting from lower market prices Energy Markets East Coast Gas Supply (PJ) 300 Short term volumes purchased to match duration of C&I sales Retail 250 contracts customers 200 150 Flexible Business -…
  27. 2H 2019 Results – Origin Energy Ltd. – slide 27
    Disciplined approach to managing for Customer Lifetime Value In Situ vs moves churn (Monthly) Wins/Retains (000s) Customer movement 25% Residential (000 customers) 1,400 10 HY2020 1,200 20% 5 1,000 15% - 800 10% 600 (5)…
  28. 2H 2019 Results – Origin Energy Ltd. – slide 28
    Cost to serve reducing in line with our 100 million target (10) (10) 307 (8) (12) 267 Transformation activities: 28 million benefit Increasing digitisation Targeted marketing and optimised channels Transforming customer…
  29. 2H 2019 Results – Origin Energy Ltd. – slide 29
    Focused on customers, cost and growth Grow w revenue Transform customer Target market Growstreams new revenue experience leading cost position streams Digital Interactions/Call volumes Online sales (%) CES Gross Profit ( million)…
  30. 2H 2019 Results – Origin Energy Ltd. – slide 30
    Medium term drivers in Energy Markets Key Drivers Market context Origin context Relatively fixed cost generation position on 15-20 TWh of supply Forward electricity and LGC prices trending Fixed cost PPA position on 3 million…
  31. 2H 2019 Results – Origin Energy Ltd. – slide 31
    Integrated Gas 31 20 February 2020 2020 Half Year Results Announcement
  32. 2H 2019 Results – Origin Energy Ltd. – slide 32
    Record APLNG production from improved field & facility performance APLNG Production 400 (100%) (PJ) Record production of 358 PJ in HY2020, up 5% from 350 HY2019: 300 Record operated daily production rate of 1,612 TJ/day achieved on…
  33. 2H 2019 Results – Origin Energy Ltd. – slide 33
    Record production and lower capex resulted in lower unit costs Capex & Opex excl. purchases 1,600 4.0 Unit costs reduced to 3.5/GJ, down 13% from HY2019 1,400 Lower costs due to: 1,200 3.0 operated cost per well2 down from 1.7…
  34. 2H 2019 Results – Origin Energy Ltd. – slide 34
    APLNG sales mix and realised prices Sales Volume (PJ) Average realised gas Price (A/GJ) 400 14 350 12 300 10 250 8 200 6 150 4 100 50 2 - - HY18 HY19 HY20 HY18 HY19 HY20 LNG contract LNG spot Domestic legacy…
  35. 2H 2019 Results – Origin Energy Ltd. – slide 35
    Upstream field performance underpins upgraded FY2020 guidance FY20 previous FY20 updated APLNG (100%) FY18 FY19 guidance guidance Production (PJ) 676 679 690 710 690 - 710 Capex + opex, excl. purchases1 (Abn) 2.6 2.7 2.8 - 3.0 2.5 -…
  36. 2H 2019 Results – Origin Energy Ltd. – slide 36
    APLNG commercial update Long term LNG customers have declared DQT for calendar Tri-Star proceedings year 2020 APLNGs position remains unchanged since 2014 that Cash flow from calendar year 2019 deferred cargoes reversion has not…
  37. 2H 2019 Results – Origin Energy Ltd. – slide 37
    Reserves base continuing to perform well APLNG reserves position1,2 (PJ) 18,000 Reserves converging towards 3P since FID 15,000 Field performing in line with expectations 12,000 Continue to mature the resource and reserves base…
  38. 2H 2019 Results – Origin Energy Ltd. – slide 38
    Beetaloo stage 2 appraisal update Kyalla shale liquids rich gas play Vertical section successfully drilled in November 2019 Operational issues encountered on initial horizontal section New horizontal section successfully drilled in…
  39. 2H 2019 Results – Origin Energy Ltd. – slide 39
    Outlook Frank Calabria, CEO 39 20 February 2020 2020 Half Year Results Announcement
  40. 2H 2019 Results – Origin Energy Ltd. – slide 40
    FY2020 Guidance update Provided on the basis that market conditions do not materially change and the regulatory and political environment do not adversely impact on operations Energy Markets (unchanged), lower than FY2019 FY19 FY20…
  41. 2H 2019 Results – Origin Energy Ltd. – slide 41
    Questions 41 20 February 2020 2020 Half Year Results Announcement
  42. 2H 2019 Results – Origin Energy Ltd. – slide 42
    Appendix 42 20 February 2020 2020 Half Year Results Announcement
  43. 2H 2019 Results – Origin Energy Ltd. – slide 43
    Segment summary Energy Markets Integrated Gas Integrated Corporate Total 1,2 1,2 - Share of APLNG Gas - Other (m) HY20 HY19 HY20 HY19 HY20 HY19 HY20 HY19 HY20 HY19 Underlying EBITDA 723 852 1,033 1,042 (127) (142) (39) (25) 1,590…
  44. 2H 2019 Results – Origin Energy Ltd. – slide 44
    Underlying ROCE rolling 12 months As at 31 Dec 2019 31 Dec 2018 Change Change (m) (m) (m) (%) Capital Employed Net Assets 13,733 12,788 945 7 including: Investment in APLNG 7,323 6,590 733 11 MRCPS issued by APLNG 2,662 3,445…
  45. 2H 2019 Results – Origin Energy Ltd. – slide 45
    Reconciliation of Adjusted Net Debt Issue Issue Hedged Hedged AUD m AUD m AUD m Currency Notional Currency Notional 31-Dec-19 31-Dec-19 31-Dec-19 Interest- Debt and CCIRS Adjusted Net bearing fair value Debt liabilities…
  46. 2H 2019 Results – Origin Energy Ltd. – slide 46
    Oil and LNG hedging and trading FY2020 oil and LNG hedging and trading FY2021 oil hedging FY2020 estimated underlying oil price of US68/bbl1 Oil hedging positions: compared to US73/bbl in FY2019 3.1 mmbbl A90/bbl fixed price swaps…
  47. 2H 2019 Results – Origin Energy Ltd. – slide 47
    47 70 80 150 100 110 130 50 60 90 120 140 70 80 150 110 100 130 50 90 120 60 140 Jul-16 Jul-16 Aug-16 Aug-16 Oct-16 Oct-16 Dec-16 Dec-16 Feb-17 Feb-17 Source: AEMO/Bloomberg…
  48. 2H 2019 Results – Origin Energy Ltd. – slide 48
    LREC prices and LREC position LREC forward prices Origins LREC position (/cert) 80 7 Millions 70 6 60 5 50 4 40 3 30 20 2 10 1 - - Jul-18 Sep-18 Nov-18 Feb-19 Apr-19 Jul-19 Sep-19 Nov-19 Feb-20 CY2020 CY2021 CY2022…
  49. 2H 2019 Results – Origin Energy Ltd. – slide 49
    Beetaloo timeline CY2019 CY2020 CY2021 Stage 2 E&A Liquids rich plays KYALLA Results Site & drilling prep Drilling Stimulation & EPT & analysis VELKERRI Site & drilling prep EPT, results Drilling & stimulation & analysis…
  50. 2H 2019 Results – Origin Energy Ltd. – slide 50
    Beetaloo multiple stacked plays increases chance of success CY20 Velkerri CY20 Kyalla liquids-rich Shale Shale Play1 Play1 1) Well locations are illustrative only Stage 2 targeting Kyalla and Velkerri liquids rich gas…
  51. 2H 2019 Results – Origin Energy Ltd. – slide 51
    Important Notices All figures in this presentation relate to businesses of the Origin Energy Group (Origin, or the Company), being Origin Energy Limited and its controlled entities, for the reporting period ended 31 December 2019 (the…
  52. 2H 2019 Results – Origin Energy Ltd. – slide 52
    For more information Peter Rice General Manager, Capital Markets Email: peter.riceoriginenergy.com.au Office: +61 2 8345 5308 Mobile: + 61 417 230 306 Liam Barry Group Manager, Investor Relations Email: liam.barryoriginenergy.com.au…

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