Origin Energy International Roadshow Grant King, Managing Director Karen Moses, Executive Director, Finance and Strategy September, October 2014
Since Origin was established in 2000 it has pursued a strategy of connecting resources to markets. Over that time it has become A regional leader in energy markets Leading integrated energy markets businesses in Australia and NZ At…
Through a decade of consolidation Origin invested in the energy markets businesses, and in recent years has focused its investment on APLNG Regionally significant position in Regional Leader in Energy Markets Natural Gas and LNG…
As APLNG delivers first LNG in mid-2015, and the energy markets businesses mature, priorities to deliver Origins strategy are changing Improving returns in energy markets businesses Deregulation of retail Improving customer…
Improving 1. returns in energy Improving markets businesses 6
In Australia, wholesale electricity prices are currently suppressed by generation over supply, driving generators into retail markets and intensifying competition LNG production in Gladstone will help NEM Net Supply and Demand1 to…
Rate of decline in per capita consumption expected to moderate however this trend will require review of policy and regulatory settings NEM Mass Market Electricity Review policy and regulatory settings 8.00 Consumption per Capita1…
While discounting has continued to impact margins, Origin has stabilised net customer accounts and is increasing its Natural Gas penetration Origins Average Signed Discount Offers for FY2014 Electricity and Natural Gas Electricity…
With completion of Retail Transformation Origin is well positioned to manage costs and improve customer experience Cost to Serve Electricity and Natural Gas 800 Cash Cost Cost incl. TSA Lower cash 40% Churn Rates 700 cost to…
In Australia, Origin has captured the benefits of rising gas prices through oil-linked gas sale agreements and increasing penetration of Mass Market customers Sources of Origin Energy Markets Retail market PJ/a East Coast Contracted…
Contact operates a similar integrated business model to Origin however Contacts primary fuels are renewables, which are not subsidised by government regulation Upstream FuelFuel Generation Wholesale/Retail Retailer Generator…
Investment in the energy markets businesses has been focused on retail systems to improve operational efficiency and customer experience and in flexible, low cost generation Segment Operating Cash Flow less Segment Growth Capital…
Delivering 1. growth in Natural Gas Improving and LNG 14
Australia is forecast to emerge as the worlds largest LNG exporter with around 85 mtpa1 directed to offshore markets by 2017, four times domestic gas demand Darwin LNG Ichthys Exporting to Asia Pacific 12 mtpa markets where demand…
APLNG is a strong and aligned incorporated joint venture, combining Origins Australian CSG experience with ConocoPhillips extensive LNG and CSG capabilities One of Australias leading Global independent exploration and Integrated…
APLNGs reserves base includes prime acreage in both known and industry accepted sweet spots in Queensland PJ 100% APLNG Reserves and Resources1 20,000 15,000 10,000 5,000 - Estimated Requirements APLNG tenure in the…
At around 75% complete1 APLNG is on track to deliver first LNG in mid-2015 Timing Milestones (year ended 30 June) Origin and ConocoPhillips form Australia Pacific LNG Incorporated JV Q2 FY2009 Environmental approvals Q3 FY2011…
Upstream Gas and Water Processing Facilities completion is a key priority Condabri Central Gas Processing Facility, February 2014 Orana Gas Processing Facility, July 2014 Reedy Creek Gas Processing Facility, July 2014 Reedy…
Drilling and gathering is progressing in line with plan Coil-tubing drill rig Gathering works in Condabri Wandoan Interconnect, July 2014 Talinga Pipeline Compression Facility, July 2014 Construction of the main gas pipeline…
The Downstream Project is progressing with all Train 1 and Outside Battery Limit modules in place APLNG Curtis Island site, February 2013 aerial view APLNG Curtis Island Site, July 2014 APLNG Curtis Island site, aerial view,…
Investments in upstream assets have delivered increased availability and production Origin Gas and Liquids Production1 Origin 2P Reserves1,2 PJe mmboe PJe 120 20.6 1,200 Production up 17% 100 17.2 1,000 800 80 13.7 600 60…
Origins short to medium term focus will be on offsetting natural field decline through in field and near field developments in Otway, Bass and Cooper basins Otway Basin Drilling of Halladale development well expected in Q1 FY2015…
Medium to longer term growth opportunities expanded through three recent transactions in Cooper, Beetaloo and Browse basins Cooper Basin JV with Senex and Planet Gas Targeting tight sands, shale and deep coal Close to existing…
Growing 1. capabilities and increasing Improving investment in renewables 25
Origin is focused on leveraging its existing renewables base of 1,213 MW to increase investments in renewable energy Portfolio of Renewable Renewable Development Opportunities Operational Generation MW 1,500 1,000 Indonesia…
Capital 1. management and funding Improving 27
The Browse acquisition was initially financed by drawdown of committed undrawn bank facilities in place to fund Origins commitments to APLNG Origin Debt & Bank Guarantee Maturity Profile as at 30 June 20141 The acquisition of a 40%…
An unfranked final dividend of 25 cps1 has been determined, representing a payout ratio of 77% of annual Underlying EPS Dividends and Underlying EPS Dividends and Free Cash Flow g y per share 160 160 Dividend per share Free Cash…
Completion of APLNG creates a step change in Origins earnings and cash flow Priorities post APLNG: The first full year of contribution 1. Increase distributions to from APLNG is expected to be shareholders FY2017, with…
Outlook 31
Looking forward, FY2015 and FY2016 are transitional years for Origin with first contribution from LNG from mid-2015, expanding gas margins and an improving supply/demand balance in electricity markets During the next two years…
Improved margin management in second half results in year on year Electricity Unit Gross Profit down 3% (1/MWh) compared to 9% down (3.20/MWh) at the first half Volumes Sold (TWh) FY2014 FY2013 Change Mass Market 18.0 20.1 (2.1)…
Natural Gas Unit Gross Profit expanded by 19% (0.40/GJ) reflecting the benefit of Origins diverse gas supply portfolio Volumes Sold (PJ) FY2014 FY2013 Change Mass Market 37.1 39.4 (2.3) C&I 71.1 87.8 (16.7) Total 108.2 127.2…
Cash cost to serve per customer 11 or 6% lower, reflecting operational improvements Cost to serve FY2014 FY2013 Change Cost to serve ( per average customer account) (169) (180) 11 Cost to maintain ( per average customer account)…
Contacts Electricity Unit Gross Profit margin up 6% driven by lower energy costs following investments in generation and fuel flexibility Volumes Sold (GWh) FY2014 FY2013 Change Mass Market 3,852 4,067 (215) C&I 4,526 4,210 316…
Important Information 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 full year ended 30 June 2014 (the…
Thank you For more information David Moon Group Manager, Investor Relations Email: david.moonoriginenergy.com.au Office: +61 2 9375 5816 Mobile: + 61 437 039 310 www.originenergy.com.au 42
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