Annual General Meeting 30 October 2009 Important Notice This - - PDF document

Annual General Meeting

30 October 2009

Important Notice

This presentation does not constitute investment advice, or an inducement or recommendation to acquire or dispose of any securities in Origin, in any j urisdiction (including the US A). This presentation is for information purposes only, is in a summary form, and does not purport to be complete. This presentation does not take into account the investment obj ectives, financial situation or particular needs of any investor, potential investor or any other person. No investment decision should be made in reliance on this

• presentation. Independent financial and taxation advice should be sought before making any investment decision.

Certain statements in this presentation are in the nature of forward looking statements, including statements of current intention, p g , g , statements of opinion and predictions as to possible future events. S uch statements are not statements of fact and there can be no certainty of outcome in relation to the matters to which the statements relate. These forward looking statements involve known and unknown risks, uncertainties, assumptions and other important factors that could cause the actual outcomes to be materially different from the events or results expressed or implied by such statements. Those risks, uncertainties, assumptions and other important factors are not all within the control of Origin and cannot be predicted by Origin and include changes in circumstances or events that may cause obj ectives to change as well as risks, circumstances and events specific to the industry, countries and markets in which Origin and its related bodies corporate, j oint ventures and associated undertakings operate. They also include general economic conditions, exchange rates, interest rates, the regulatory environment, competitive pressures, selling price, market demand and conditions in the financial markets which may cause obj ectives to change or may cause outcomes not to be

• realised. None of Origin or any of its respective subsidiaries, affiliates and associated companies (or any of their respective officers,

employees or agents) (the "Relevant Persons") makes any representation, assurance or guarantee as to the accuracy or likelihood of fulfilment of any forward looking statement or any outcomes expressed or implied in any forward looking statements. In addition, statements about past performance are not necessarily indicative of future performance. The forward looking statements in this presentation reflect views held only at the date of this presentation. S ubj ect to any continuing obligations under law or the AS X Listing Rules, Origin and the Relevant Persons disclaim any obligation or undertaking to disseminate after the date of this i d i i f d l ki fl h i i i l i presentat ion any updates or revisions to any forward looking statements to reflect any change in expectat ions in relat ion to any forward looking statements or any change in events, conditions or circumstances on which such statements are based. No representation or warranty, express or implied, is or will be made in relation to the accuracy or completeness of the information in this presentation and no responsibility or liability is or will be accepted by Origin or any of the Relevant Persons in relation to it. In particular, Origin does not endorse, and is not responsible for, the accuracy or reliability of any information in this presentation relating to a third party. All references to "$" are references to Australian dollars unless otherwise specified. A reference to Contact is a reference to Contact Energy of New Zealand, a 51% subsidiary of Origin. A reference to APLNG is a reference to Australia Pacific LNG Pty Limited, an incorporated j oint venture that Origin h ld 50% i t t i

2

holds a 50% int erest in. All comparative data is in relation to the prior corresponding period, 1 July 2007 to 30 June 2008, unless otherwise stated. Certain comparative amounts have been reclassified to conform with the current year’ s presentation.

The Board

3

The Board

J Roland Williams CBE Independent Non-Executive Director p

4

The Board

Bruce G Beeren Non-Executive Director

5

The Board

Trevor Bourne Independent Non-Executive Director p

6

The Board

Grant A King Managing Director g g

7

Company S ecretary

Andrew C Clarke Company S ecretary & Group General p y y p Counsel

8

The Board

Helen M Nugent AO Independent Non-Executive Director p

9

The Board

Gordon M Cairns Independent Non-Executive Director p

10

The Board

Karen A Moses Executive Director Finance and S trategy gy

11

The Board

John H Akehurst Independent Non-Executive Director p

12

13

Chairman’ s Address

S hare price performance

15

Record underlying profit of $530 million

16

Earnings per share – up 19 per cent

17

S trong balance sheet provides opportunity for future investments

Undrawn Committed Debt Available Funding Capacity at 30

As at 30 September 2009 5

Cash Committed Debt Facilities Capacity at 30 September 2009 A$b

(1.0) 4 3 3.4 4.4 2 1

18

Origin invested over $2 billion in gas production and electricity generation proj ects generation proj ects

Kupe

Darling Downs Power S tation Mortlake turbine Cullerin Range Wind Farm

19

Chairman’ s Address

20

Renewable Energy Target provides increased certainty for investors in renewable energy technologies in renewable energy technologies

S

• lar

Cullerin Range Wind Farm Geodynamics G d i Geodynamics

21

Chairman’ s Address

22

Dealing with an uncertain future requires good governance

23

Chairman’ s Address

24

Investing in communities - our future customers, investors, employees and neighbours p y g

25

Helping to educate 500,000 kids about using energy wisely

Investing in communities - our future customers, investors, employees and neighbours p y g

26

Building solid partnerships with landowners and communities

Chairman’ s Address

27

Managing Director’ s Address

28

Contribution to underlying earnings

O ’ f f l 2009

• Origin’s EBITDAF for financial year 2009

was $1.2 billion

• EBITDAF from Origin’s integrated business

excluding Contact increased by $20 million t $850 illi to $850 million

• Contact’s contribution reduced 25%

to $369 million

*

FY 2009 EBITDAF by Segment

29

APLNG continues to grow its CS G reserves with significant reserves increases that demonstrate the size and quality of APLNG’ s CS G resource that demonstrate the size and quality of APLNG s CS G resource

2C 3C 3P 2P

S O igi S

• urce: Origin

30

In New Zealand - the Kupe Gas Proj ect is nearing completion

Kupe Gas Proj ect onshore product ion facilit ies

• Proj ect construction essentially complete
• Proj ect handed over from construction team to
• perations team
• Expecting to open the wells and bring raw gas ashore in
• Expecting to open the wells and bring raw gas ashore in

December Quarter 2009

• Gross annual production expected to be

approximately 20 PJ of gas sales together with over 2 million barrels of condensate

31

with over 2 million barrels of condensate and LPG

Generation: power station capacity has more than doubled in 2009

Cullerin Range Wind Farm, NS W g , Uranquint y Power S t at ion, NS W Quarant ine Power S t at ion, S A

32

Mt S tuart Power S tation expansion due for completion late calendar 2009

Mt S t uart Power S t at ion

• Peaking power station being expanded from

288MW to 414MW 288MW to 414MW

• Townsville, Queensland
• Currently kerosene-fired and capable
• f being converted to natural gas

33

g g

Darling Downs Power S tation - once commissioned - will be the largest CCGT plant in Australia largest CCGT plant in Australia

• 630 MW Base Load plant
• Largest CCGT plant in Australia
• All gas turbines installed at site
• Firing of first gas turbine expected in November 2009
• Firing of first gas turbine expected in November 2009
• All three gas turbines synchronised to grid during

December 2009

• Expected to be fully commissioned in the

l tt h lf f FY10

34

latter half of FY10

Mortlake Power S tation will add significant generation capacity in Victoria

550 MW ki l

• 550 MW peaking plant
• S

ite currently being prepared and pipeline under construction

• Turbines delivered (as above)

( )

• Expected to be completed in late 2010
• Designed for conversion to CCGT at a later stage if

required

35

Energy retailing is the largest segment in our business today

36

Retail Transformation

• Partnered with WIPRO to transition to an
• Partnered with WIPRO to transition to an

integrated S AP billing and customer management platform

• Proj ect expected to improve customer

service and use of technology to engage with service and use of technology to engage with customers

• Process improvement and business

simplification activities have commenced

• Delivery of complete proj ect will be

completed over the next three years

• Total of 158 Origin employees have

transferred to WIPRO, with almost 100 more transferred to WIPRO, with almost 100 more to transfer by December 2009

37

Transmission constraints

Transmission constraints and unusual weather conditions adversely impacted Contact in New Zealand

• Two high voltage DC cables (Poles 1 and 2)

connect the North and S

• th Islands

impacted Contact in New Zealand

connect the North and S

• uth Islands
• Pole 1 was unexpectedly removed from

service in November 2007 resulting in the islands operating as separate markets in

Transmission constraints north of W lli t d i

islands operating as separate markets in certain conditions

• Unusual weather conditions in the

S eptember Quarter 2008, followed by l k di i i h D b

Wellington during August

unusual market conditions in the December Quarter 2008 highlighted additional transmission constraints

• As a result Contact was not able to utilise

Constraints over the Cook Strait

• As a result Contact was not able to utilise

the full strength of its integrated retailer / generator business model

the Cook Strait cable Lo er So th Island Lower South Island constraints limited

• utput later in the half

year

38

Proj ects to restore flexibility back into Contact’ s portfolio are on track for commercial operation in mid-2010 p

Ahuroa gas storage

• Adds flexibility to gas supply by storing gas

during periods of low demand for thermal generation Replaces supply flexibility provided Stratford peakers (200 MW)

• Adds flexible generation capacity. Replaces

New Plymouth with new technology fast- t t ffi i t t bi

• generation. Replaces supply flexibility provided

under legacy gas contracts.

• Proj ect being developed by Origin on behalf of

Contact Energy start efficient gas turbines

39

The Renewables Energy Target will drive significant investment in wind power generation and will require a significant capacity of ki ti t b b ilt t t it i t itt peaking generation to be built to support its intermittency…

• Wind is currently the most cost effective

large scale renewable technology available d O i i ’ d lli t 6 000

Forecast Additional NEM Generation by Fuel Type to Meet Demand Growth

and Origin’ s modelling suggests over 6,000 MW of new wind capacity to be built in the market by 2020

• The current cost of wind farm developments

p are $2.5m to $3.0m per MW and this may result in investment in the market of approximately $18 billion

• A significant capacity of open cycle gas-fired
• A significant capacity of open cycle gas-fired

generation is required to support wind farm capacity, the cost of which significantly increases the cost of wind power bl d f d f

• Public and private funding for emerging

renewable technologies may fast track their development providing a competitive alternative to wind

(1)

however the advancement of emerging renewable technologies

S

• urce:

Origin forecast based on NEMMCO’ s S OO 2008 demand dat a Not es: Excluding non renewable plant current ly under const ruct ion

40

… however, the advancement of emerging renewable technologies such as geothermal and solar may provide a competitive alternative to wind

(1) 8% Cont ribut ion Fact or for wind based upon NEMMCO’ s S OO 2008 S ummer Cont ribut ion Fact ors for Vict oria and S

• ut h Aust ralia

In the coming year Origin has committed to a significant offshore exploration programme targeting substantial reserves increases near domestic markets in A stralia and Ne Zealand near domestic markets in Australia and New Zealand

Northland Basin Origin, as Operator of permit PEP 38619, has secured the semi submersible rig “ Kan Tan IV” secured the semi submersible rig Kan Tan IV to drill the exploration wells Korimako 1 and Tarapunga 1. Drilling operations are expected to commence in Q2 2010. Otway Basin S

• merset 1 exploration well currently

drilling in T/ 34P. Bass Basin T f il 2 i l ll d illi i T/ 18P b

The initial 5 well program is expected to cost Origin around

41

Trefoil 2 appraisal well drilling in T/ 18P, to be followed by the Rockhopper 1 exploration well.

expected to cost Origin around $100m, and may be extended to drill additional wells

APLNG is progressing well with the development of its CS G to LNG proj ect and has now selected a site at Gladstone for its

• APLNG has secured the Laird Point site on

Curtis Island in the Port of Gladstone for its

p j downstream operations

proposed CS G to LNG plant

• 230 hectare site that is well positioned for a

world class multi train LNG development Environmental Impact S tatement expected to

• Environmental Impact S

tatement expected to be lodged in early 2010

• Final Investment Decision expected at the

end of 2010 Possible layout for APLNG’s LNG plant at Laird Point on Curt is Island Laird Point on Curt is Island

42 S

• urce: Origin

Managing Director’ s Address

43

Chairman’ s Address

44

Financial S tatements

45

Resolution 2: Adoption of p Remuneration Report

46

Resolution 2: Adoption of Remuneration Report Adoption of Remuneration Report Proxy votes received: For 395,982,877 Against 19,302,311 Against 19,302,311 Open 15,463,025 Abstain 2 744 625 Abstain 2,744,625

47

48

Resolution 3: Election of Directors

49

Resolution 3

Trevor Bourne Independent Non-Executive Director p

50

Resolution 3: Election of Director – Trevor Bourne Election of Director Trevor Bourne Proxy votes received: For 413,842,376 Against 3,114,480 Against 3,114,480 Open 15,522,675 Abstain 1 016 414 Abstain 1,016,414

51

52

Resolution 3: Election of Directors

53

Resolution 3

Helen M Nugent AO Independent Non-Executive Director p

54

Resolution 3: Election of Director – Helen Nugent Election of Director Helen Nugent Proxy votes received: For 413,875,037 Against 3,119,166 Against 3,119,166 Open 15,518,398 Abstain 983 344 Abstain 983,344

55

56

Resolution 3: Election of Directors

57

Resolution 3

John H Akehurst Independent Non-Executive Director p

58

Resolution 3: Election of Director – John Akehurst Election of Director John Akehurst Proxy votes received: For 414,733,289 Against 2,048,124 Against 2,048,124 Open 15,633,659 Abstain 1 080 873 Abstain 1,080,873

59

60

Resolution 3: Election of Directors

61

Resolution 3

Karen A Moses Executive Director Finance and S trategy gy

62

Resolution 3: Election of Director – Karen Moses Election of Director Karen Moses Proxy votes received: For 412,203,967 Against 3,185,612 Against 3,185,612 Open 16,942,573 Abstain 1 157 509 Abstain 1,157,509

63

64

Resolutions 4 and 5: Grant of Options and p Performance S hare Rights

65

Resolution 4: Grant of Options and Performance p S hare Rights to Grant A King – Managing Director

66

Resolution 4: Grant of Options and Performance S hare Rights to Mr Grant A King – Managing Director Rights to Mr Grant A King Managing Director

To consider and, if thought fit, pass the following resolution as an ordinary resolution: “ That to satisfy the Company’ s decision to deliver Managing Director Mr Grant King with a long term incentive for the years ended 30 June 2009 and 2010 the grant to Mr Grant King, of: Options to subscribe for fully paid ordinary shares in the Company, at an exercise price equal to the Origin Energy Market Price and Performance S hares Rights to subscribe for fully paid ordinary shares in the Company (in equal proportions by value as determined on 2 November 2009 and to a total value equal to Mr King’ s Long term Incentive Entitlement for the 2008 09 financial year) and the allotment to Mr Grant King of fully paid term Incentive Entitlement for the 2008-09 financial year) and the allotment to Mr Grant King of fully paid

• rdinary shares in the Company pursuant to the valid exercise of those Options and Performance S

hare Rights (The 2009 Tranche) and

• a. Options to subscribe for fully paid ordinary shares in the Company, at an exercise price equal to the Origin

Energy Market Price and Performance S hares Rights to subscribe for fully paid ordinary shares in the Company (in equal proportions by value as determined on 1 S eptember 2010 and to the total value of Mr King’ s Long term Incentive Entitlement for the 2009-10 financial year) and the allotment to Mr Grant King of fully paid

• rdinary shares in the Company pursuant to the valid exercise of those Options and Performance S

hare Rights;

• rdinary shares in the Company pursuant to the valid exercise of those Options and Performance S

hare Rights;

• r
• b. Performance S

hare Rights to subscribe for fully paid ordinary shares in the Company (to a total value, as determined on 1 S eptember 2010, equal to Mr King’ s Long term Incentive Entitlement for the 2009-10 fi i l ) d h ll M G Ki f f ll id di h i h C financial year) and the allotment to Mr Grant King of fully paid ordinary shares in the Company pursuant to the valid exercise of those Performance S hare Rights (The 2010 Tranche) in each case on the t erms as set out in the Explanatory Notes which accompanied the Notice p y p convening this Meeting is hereby approved”

67

Resolution 4: Grant of Options and Performance S hare Rights to Mr Grant A King – Managing Director Rights to Mr Grant A King Managing Director Proxy votes received: For 394,151,263 Against 20,849,007 Against 20,849,007 Open 8,760,233 Abstain 2 620 894 Abstain 2,620,894

68

69

Resolution 5: Grant of Options and p Performance S hare Rights to Ms Karen Moses – Executive Director

70

Executive Director

Resolution 5: Grant of Options and Performance S hare Rights to Ms Karen Moses – Executive Director Rights to Ms Karen Moses Executive Director

To consider and, if thought fit, pass the following resolution as an ordinary resolution: “ That to satisfy the Company’ s decision to deliver Execut ive Director Ms Karen Moses with a long term incentive for the years ended 30 June 2009 and 2010, the grant to Ms Moses, of: Options to subscribe for fully paid ordinary shares in the Company, at an exercise price equal to the Origin Energy Market Price and Performance S hares Rights to subscribe for fully paid ordinary shares in the Company (in equal proportions by value as determined on 2 November 2009 and to a total value equal to Ms Karen Moses’ Long term Incentive Entitlement for the 2008 09 financial year) and the allotment to Ms Karen Moses of Moses’ Long term Incentive Entitlement for the 2008-09 financial year) and the allotment to Ms Karen Moses of fully paid ordinary shares in the Company pursuant to the valid exercise of those Options and Performance S hare Rights (The 2009 Tranche) d and

• a. Options to subscribe for fully paid ordinary shares in the Company, at an exercise price equal to the Origin

Energy Market Price and Performance S hares Rights to subscribe for fully paid ordinary shares in the Company (in equal proportions by value as determined on 1 S eptember 2010 and to the total value of Ms Karen Moses’ Long term Incentive Entitlement for the 2009 10 financial year) and the allotment to Ms Karen Moses of fully Long term Incentive Entitlement for the 2009-10 financial year) and the allotment to Ms Karen Moses of fully paid ordinary shares in the Company pursuant to the valid exercise of those Options and Performance S hare Rights;

• r

b P f S h Ri h b ib f f ll id di h i h C ( l l l

• b. Performance S

hare Rights to subscribe for fully paid ordinary shares in the Company (to a total value equal, as determined on 1 S eptember 2010, to Ms Karen Moses’ Long term Incentive Entitlement for the 2009-10 financial year) and the allotment to Ms Karen Moses of fully paid ordinary shares in the Company pursuant to the valid exercise of those Performance S hare Rights (The 2010 Tranche) (The 2010 Tranche) in each case on the terms as set out in the Explanatory Notes which accompanied the Notice convening this Meeting is hereby approved”

71

Resolution 5: Grant of Options and Performance S hare Rights to Ms Karen Moses – Executive Director Rights to Ms Karen Moses Executive Director Proxy votes received: For 393,806,139 Against 21,145,140 Against 21,145,140 Open 8,756,927 Abstain 2 617 090 Abstain 2,617,090

72

30 October 2009

Annual General Meeting