[PPT] - Pacific Energy Limited Power Generation Macquarie Australia PowerPoint Presentation

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Macquarie Australia Conference May 2013

ASX: PEA

Pacific Energy Limited

Power Generation

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Power Station Developer & Owner – approx 250MW

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Kalgoorlie Power Systems (KPS) 240MW Pacific Energy Limited (ASX: PEA) Power station developer, owner and electricity supplier Hydro 6MW

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51% 23% 26%

Ken Hall Pacific Road Other

Corporate Snapshot

3 Key shareholders Share price performance (last 5 years) Trading summary & capital structure Directors and management

ASX Code
12 month high
12 month low
Current share price
Shares outstanding
Market capitalisation
Cash
Debt
Enterprise value

Director

Cliff Lawrenson
Adam Boyd
Ken Hall
Louis Rozman
Stuart Foster

Position Non Executive Chairman Managing Director & CEO Executive Director Non Executive Director Non Executive Director PEA 0.54 0.43 0.465 363 169 12 45 201 $ $ $ m $m $m $m $m

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KPS power stations are designed, constructed and maintained by KPS personnel

Power Supply Infrastructure

Generator hall Power station and adjacent switch room Switch room

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KPS – Business Overview

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Proven track record with strong brand and industry reputation

Established 1981 – strong reputation for low cost reliable electricity supply
‘Blue chip’ clients and repeat business
23 power stations under contract (240MW)

Business model – BOM contract structure

Monthly ‘take or pay’ revenue model (3 to 15 year contract terms)
Miner supplies and pays for fuel (natural gas or diesel)
Design provides for low cost power station redeployment upon mine closure

KPS competitive advantage

Standardised design approach (low risk execution / minimum lifecycle costs)
Enhanced reliability and low cost
Engine maintenance interval extension and reduced maintenance costs

KPS competitive advantage

24 hour real time monitoring and management systems reduces maintenance

and personnel costs

Sophisticated control systems provide for unmanned operation

“Build / Own / Maintain” Established 30 Year Reputation In House Construction & Maintenance Monitoring Control Systems

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KPS – Business Overview (cont’d)

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Contracted long term annuity style cashflow (3 to 15 years)

Average 5 year+ contract portfolio term with early contract termination

payments

Contracts invariably “roll-over” at contract end if mine continues

KPS competitive advantage

Equipment modification reduce maintenance and fuel consumption
Waste heat recovery (low cost) – best practice fuel efficiency
Gas conversion technology (low cost) – diesel to gas switch

Technology Focus Transparent Long Term Earnings

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106 146 192 250 300 50 100 150 200 250 300 350 2009 2010 2011 2012 2013

MW Contracted Growth

Growth Momentum

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Group contracted capacity approximately 250MW (includes 6MW hydro in Victoria)

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Record Earnings Growth To Continue

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New contracted capacity to deliver FY13 and FY14 earnings growth ∗ Analyst Range

21 27 32 41 54 13 18 21.5 28 36-38 10 20 30 40 50 60 2010A 2011A 2012A 2013A/F 2014CF

$M Revenue EBITDA

18.6 12.6

∗

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Quality Client Portfolio

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Major resource companies and revenue diversity brings opportunity

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KPS – National Footprint

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KPS has an established and significant market position Western Australia

KPS Office and

Workshop

17 Power Stations
190+MW Capacity

Northern Territory

3 Power Stations
37MW Capacity

Domestic Expansion Opportunities South Australia

1 Power Station
11MW Capacity

Victoria

2 Hydro Stations
6MW Capacity

Perth Workshop (under development)

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HY2013 Record Result – $12.6M Adjusted EBITDA, up 19% and $6.5M Adjusted NPAT, up

16% on prior corresponding period

FY13 Achievements To Date

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45MW of new power station capacity commissioned in FY13 to date
Advancing construction of 48MW new power station capacity to be completed by August

2013 – significant impact on FY2014 earnings

FY13 EBITDA Guidance unchanged $28M
Tenders / Indicative Proposals submitted >200MW (subject to mine development)
Credit facility restructure – $75M of credit funding limits (Drawn $39M) for future capacity

growth ($60M available)

Strong Cashflow generation / FY13 Sustaining Capex < $2M / FY13 Maiden Franked

Dividend flagged

Corporate Opportunities to expand capability / growth trajectory under consideration

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Net Impact Estimated – Approximately FY14 $1.00M EBITDA reduction
12MW Lake Johnson Power Station Contract – Termination discussions on going

(Termination Payment expected)

11MW Bronzewing Power Station Contract Terminated (Administrator appointed)

Resource Sector Slowdown – Impact To Date

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Mitigation – 5MW C&M supply going forward at above mines

– 12MW Existing Contract expansions under negotiation for completion in H1 FY14

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Tropicana Carosue Saracen Contract Client 2013 2016 2017 Mine Life Cosmos 2 Xstrata 2014 2015 Other Other Granites Newmont Garden/ Moolart Well Regis Jacinth Iluka Anglo Gold Nullagine Millenium DBS Gwalia St Barbara Newmont

Existing Contracts

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2028 2018 2019 up to 2022 2028 2028

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Diversified & Contracted Revenues

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Existing client revenue (2013 to 2018) Existing revenue (2013 to 2018) Portfolio gold commodity exposure focussed

14% 7% 6% 7% 5% 11% 11% 4% 3% 3% 18% 10% Newmont St Barbara Xstrata Alacer Iluka Regis Sandfire Millenium Minerals Navigator Norilsk AngloGold Other 69% 8% 22% Gold Nickel Other

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Organic growth – National and later Africa focus (200MW market opportunity – 24 months)
Acquisition opportunities – businesses to deliver accretive shareholder value, expanded

power station capacity and related energy services

Capacity & Geographical Footprint Expansion

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Pacific Energy remains focussed on the value accretive growth of its asset and revenue portfolio Domestic & International Expansion Opportunities

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Competitive Advantage – Technology

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Enhanced competitive advantage and opportunities to leverage KPS capabilities Focus on resource sector cost reduction and carbon emission imposts are driving market focus towards reduced fuel consumption and cheaper fuel substitutes

Access to lower cost fuels (natural gas)
Dual Fuel – gas and diesel fuel flexibility providing clients with lowest cost fuel option available
Waste Heat Recovery – proven fuel consumption savings technology
Proven Low Cost Delivery – fit for purpose design and innovation
Automated control - < 45 employees for 250MW of generation capacity

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Waste Heat Recovery – Fuel Saving Solution

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KPS competitive advantage enhanced – 7% fuel savings
KPS and Mine Client share fuel saving and emission reduction benefits
Earnings growth achieved from existing power station fleet
100MW waste heat recovery solution roll-out over 3 - 4 years

100MW 20MW PEA EBITDA enhancement* $6.0M pa $1.2M pa

* Fuel savings only based on current diesel fuel prices @ $1.00/litre

Pacific Energy Benefits

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Investment Rationale

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Strong outlook for continued demand and significant business opportunities for KPS Industry fundamentals

Projects underpinned by resources production phase exposure.

Competitive, low cost solutions to continue to deliver growth High Growth Mining Regions

Demand for long term cost effective power solutions remains (all

infrastructure constrained environments) New Markets

Clear strategy and significant market opportunities remain for new

replacement and cost reduction technology Strong Relationships

Strong relationships with global and Australian based miners

provides ongoing opportunities

Business development /innovation partnership focus

Active Management and Promotion

Focus on competitive advantage/innovation/technology
Proven management capability

Self Funding Business

KPS Business generates significant surplus cash to fund future growth

and dividends to shareholders

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Conclusion

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Thank You Q&A

Gwalia Deeps Power Station - St Barbara