White Energy Company Limited White Energy Company Limited (ASX : - - PowerPoint PPT Presentation

White Energy Company Limited White Energy Company Limited

(ASX : WEC) (ASX : WEC)

Managing Director’s Presentation

Annual General Meeting 30 November 2007

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Whatever your views on coal, it’s clearly here to stay but we need to find a balance between our energy ambitions and environmental concerns. White Energy’s coal upgrading technology helps address this important global issue.

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2007 Highlights

• BHP Billiton appointed as global marketing agent in exchange for US$35M funding
• package. All relevant documentation in relation to this transaction has now been finalised.
• Joint venture with Bayan Resources finalised and construction of first Indonesian plant

commenced.

• Second Indonesian joint venture announced with Adaro Group and Itochu Corporation.
• Final stage of China feasibility with Datang International Power Company Ltd.
• During FY07 and post balance date the Company has raised a significant amount of

capital (approximately A$100M) to fund its development program.

• American Depository Receipt program initiated.
• AusIndustry grant secured (A$4.35M).

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Financial Commentary

• Net loss for year ended 30 June 2007 was $10.6M, which includes:

– Depreciation / amortisation charges $3.3M (mainly amortisation licence fee $3.1M). – Unrealised foreign exchange losses $0.6M. – Employee share based payment expense $2.1M.

• Increase in net asset position from $61.4m to $77.5M.
• Cash on hand at 30 June 2007 $15.1M.
• Significant investment in core infrastructure (mainly critical engineering and design

works) were necessary in FY2007 to create the foundation from which the Company can rollout its process on a global basis.

• Post balance date, WEC has increased its access to funds by A$85M through:

– Raising of AU$45M in a convertible note issue; and – BHP Billiton US$35M facility.

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Financial Snapshot (30 June 2007)

61,415 77,469 Total Equity 61,415 77,469 Net Assets 4,411 8,423 Total Liabilities 65,826 85,892 Total Assets 59,126 67,482 Non Current Assets 6,700 18,411 Current Assets FY2006 FY2007 (A$000’s)

Consolidated Balance Sheet

6,564 15,072 Closing Cash & Cash Equivalents 3,615 8,508 Net Increase (decrease) in cash & equivalents 5,902 22,509 Net Cash (outflows) from Financing Activities (1,518) (12,700) Net Cash (outflows) from Investing Activities (769) (1,301) Net Cash (outflows) from Operating Activities FY2006 FY2007 (A$000’s)

Consolidated Statement of Cash Flows

Dwindling reserves of oil and natural gas suggest that their contribution to world energy use will show modest growth at best. New demand will be met partly by carbon-free energy sources, but mostly by coal.

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Bayan Resources Joint Venture Progress

• Substantial effort has been devoted to delivering the Bayan Project.
• The Bayan Project is a JV owned 51% by WEC and 49% by Bayan.
• The JV is building its first 1MTPA plant with production capacity growing to 5MTPA.
• Bayan has agreed to acquire up to 1.5 MTPA of upgraded coal from the JV over the first five

years of the plant’s operation representing over US$200M in guaranteed revenue for the JV.

• WEC entered into an alliance with Thiess Indonesia to build, operate and maintain the Tabang
• plant. This extends to a broader role for Thiess to build subsequent plants as WEC's

Indonesian EPCM partner. The agreement with Thiess is strategically important however their involvement obviously will increase overall project costs. In our view, involving Thiess is critical in that they provide: – greater certainty that the project is delivered on time and on budget. – a mechanism for better protecting our core intellectual property.

• The JV continues to make steady progress on all major activities relating to the construction of

the plant: – Site work activities completed to date include the site camp facilities, earthworks of production plant and power station, haul roads, lay down areas and drainage works.

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Bayan Resources Joint Venture Progress

Bayan JV : Tabang Project Site Kalimantan (October 2007)

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Bayan Resources Joint Venture Progress

– Detailed engineering and design of the production plant has been completed and documents issued for construction. This has included enhancements to the existing plant design which improve efficiency, scalability and economies but have resulted in a slight increase in overall project costs. – All of the long lead items for the production plant have been ordered and these items will be received on site progressively from now through to early 2008 in accordance with the procurement schedule. – Global prices for raw material inputs (most notably steel) have continued to escalate which has impacted costs. Now that all design elements are fixed (including all localisation issues) WEC is in the process of locking in the significant material purchase arrangements to minimise any future escalation issues. – The process control software design is being undertaken with testing of software due to be completed by end of the year. – The power station (8mW) for the Tabang plant is being delivered under a turnkey

• contract. The contractor is on site and critical foundation work almost completed.

Installation of the power station is currently on schedule which is critical to ensuring that the plant is commissioned in accordance with the project plan. – The JV has ordered and will commission more briquetters than is required for 1MTPA

• utput. This initially assists with redundancy issues but has the benefit of facilitating

more rapid scale up of the plant.

“Coal needs to be clean to be viable. Technologies already exist, the issue is their application.”

Source: World Energy Council, 2007

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Research and Technology Enhancements

Act as an enabling technology partner today:

• Coal upgraded by White Coal Technology can be used to supply each of the stages of

the coal technology lifecycle offering significant environmental benefits.

• WEC will continue to improve our existing process and invest in developing our

technology with a particular emphasis on applications to coking coal Invest in coal technologies for the future:

• As the global market for coal and related end products grows, White Energy will

continue to develop and acquire synergistic technologies in both coal upgrading technology and emissions reductions.

• Developing a unique suite of coal upgrading and emissions reductions technologies will

enable White Energy to partner with a growing number of players in the coal value chain and enable it to be a key player in a zero emissions world. White Energy’s strategy is to:

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WEC - A Facilitator to Zero Emissions

Source: Adapted from World Coal Institute (2003) Coal upgraded by the White Coal technology can be used to supply each of the stages of the coal technology lifecycle offering immediate CO2 emission reductions of up to 10%. Conventional sub-critical plants can achieve thermal efficiencies of up to 40%. Improving less efficient plants will reduce CO2 emissions by up to 22%. Improved efficiency sub-critical plants operate throughout the world. Supercritical and ultra supercritical plants can achieve efficiencies of up to 45% and operate in Japan, USA, Europe, Russia, China, and Australia. Integrated gasification combined cycle and pressurized fluidized bed combustion plants operating in the USA, Japan, and Europe achieve very high efficiencies and low CO2 emissions. Integrated gasification fuel cells, under development, can achieve even higher efficiencies. Carbon capture and storage can reduce emissions of C02 to near zero. Advanced technologies gasify coal by heating it to temperatures so high that it breaks down into a variety of petroleum products. CO2 is separated out and then sequestered by directing it into underground reservoirs where it will remain buried forever. When combined with advanced technologies, carbon capture and storage will facilitate the hydrogen fuel economy.

White Coal + Efficiency Improvements Existing Power Plants + + Advanced Technologies New Power Plants Zero Emissions

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Asian Coal Outlook

• Global thermal coal import demand (seaborne plus

land-borne) is forecast to grow by 116Mt by 2015.

• Demand for thermal coal in Asia will grow by 77Mt

accounting for 66% of total growth.

• 41Mt or 55% of thermal coal demand growth in Asia is

in India and China.

• China predicts energy sector growth of 15% p.a. with

majority being coal based.

Strategy for the Year Ahead - Asia

Initial Targets = Indonesia & China

Operations (build earnings and cash flow): – Bayan Resources (Indonesia): commission the 1MTPA plant at the Tabang coal mine in Indonesia. – Adaro Group / Itochu Corporation (Indonesia): complete all pre production work and commence construction of the 1MTPA plant at one of Adaro’s mines in East Kalimantan. – Datang International Power (China): conclude financial feasibility, agree holding structure issues and conclude JV to build ten 1MTPA White Coal technology plants at Datang’s sub-bituminous coal mine in Inner Mongolia, China.

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North American Coal Outlook

• Use of sub-bituminous coal has grown rapidly as US power

utilities switch from local bituminous coals in part to avoid the need for costly flue gas desulphurization plants.

• Powder River Basin region is the largest sub-bituminous

coal producing region in the world, with an annual output > 350M tonnes

• The low sulphur Powder River Basin coals have very high

inherent moisture (20-25%) = substantially lower power generation and high transportation costs.

• WEC has tested coal from four mines located in the Powder

River Basin with excellent results

Strategy for the Year Ahead - USA

Initial US Targets: Powder River Basin & Texas

Execute on US market entry strategy: – WEC is in the process of establishing

• perations in the US with a view to having a

presence there early next year. – WEC is assessing potential US partnering

• pportunities with both coal and power
• utilities. WEC expects to make progress on

these initiatives in early 2008. – With Allied Syngas Corporation and others, WEC will also explore the utilisation of its technology to assist in the process of generating synthetic natural gas. – The relatively dust free nature of White Energy’s product significantly adds to WEC’s

• pportunity in the US. This particular

characteristic appeals to US coal industry stakeholders including the railways, utilities and coal producers.

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Strategy for the Year Ahead Cont…

Geographic expansion and additional value capture:

• Continue to review synergistic acquisition targets with a view to adding strategic assets

to the Company’s clean energy portfolio.

• Continue to develop core technology and develop markets globally with a view to

creating an attractive pipeline of production opportunities.

• Continue to work together with BHP to investigate the opportunity to jointly develop sub

bituminous coal deposits.

• Invest in coking coal applications for WEC’s patented process.
• De merge or sell WEC's portfolio of mining exploration tenements.
• Review the potential for a dual listing, or re-listing of WEC either on AIM or NASDAQ

with a view to maximising shareholder value.

White Energy has a technology that represents a first step in building a solution. It is an important step but not the panacea. White Energy will continue to work to make even greater inroads into coal upgrading to produce a cleaner and more efficient fuel.

For more information visit our website at www.whiteenergyco.com

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Except for the historical information contained herein, the matters discussed in this presentation contain forward-looking statements, including statements, containing the words “planned”, “expects”, “believes”, “strategy”, “opportunity”, “anticipates”, and similar words. Such forward-looking statements are subject to known and unknown risks, uncertainties, or other factors that may cause the company’s actual results to be materially different from historical results or any results expressed or implied by such forward-looking statements. We assume no obligation to update any forward-looking statements to reflect events or circumstances arising after the date hereof. In addition where comparisons are made between White Energy Company and other companies, we have made best efforts to properly interpret publicly made information by these companies but cannot be certain that such comparisons are completely accurate.

Forward Looking Statements