2018 Investor Briefing Day - Origin Energy · 2 7 December 2018 2018 Investor Briefing Day Safety...

2018 Investor Briefing Day

7 December 2018

2 7 December 2018 2018 Investor Briefing Day

Safety Moment

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• Follow instructions of Wardens

• Be ready to evacuate

Evacuation tone “whoop, whoop, whoop”• Leave now via nearest exit

• Proceed calmly to assembly area


Agenda

Time Duration Topic Presenter

9:30 5 mins Introduction Peter Rice (GM, Capital Markets)

9:35 20 mins Strategic overview Frank Calabria (CEO)

9:55 20 mins Capital management Lawrie Tremaine (CFO)

10:15 20 mins Integrated Gas Mark Schubert (EGM, Integrated Gas)

10:35 20 mins Q&A session

10:55 20 mins Morning tea

11:15 20 mins Energy Markets - Retail Jon Briskin (EGM, Origin Retail)

11:35 20 mins Energy Markets - Energy Supply & Operations

Greg Jarvis (EGM, Energy Supply & Operations)

11:55 35 mins Wrap up / Q&A session Frank Calabria (CEO)

12:30 60 mins Lunch


Strategic OverviewFrank Calabria


Where we are

➢ Target capital structure in sight

➢ Reducing costs and improving returns

➢ Two strong and diversified cash generating businesses

➢ Reliable performance and competitive cost position at APLNG

➢ Headwinds in Energy Markets – government intervention and lower forward wholesale prices

➢ Balancing disciplined approach to investment opportunities and shareholder distributions


Our strengths

Energy Markets➢ Electricity portfolio well positioned - renewables plus firming

➢ Strong gas supply position - length, cost and transport

➢ Large retail customer base positioned to capture future energy needs

Integrated Gas➢ APLNG

– Australia’s largest CSG reserves base, performing in line with expectations

– Proximity to growing Asian market

– Major contributor to the domestic market

➢ Potential to grow resources (e.g. Beetaloo)


0

5

10

15

20

2017 Actual

2040CurrentPoliciesscenario

2040New Policies

scenario

2040Sustainable

Developmentscenario

Bto

e

Coal Oil Nuclear Gas Renewables

Fuels of the future

World primary energy demand

Source: McKinsey Energy Insights analysis, Energy Insights Gas Intelligence Model, IHS Vintage

Source: International Energy Agency (IEA), World Energy Outlook 2018

Global LNG supply and demand

22%

27%

32%

5%

14%25%

25%

29%

5%

17%

25%

22%

28%

5%

20%

24%

11%

22%

9%

32%

Renewables and gas growing in all scenarios


Global trends in energy markets

Decarbonisation

Decentralisation

Digitisation

• Renewables lowest cost form of new generation• Gas as a firming fuel

• Lower technology costs enabling new customer-led business models

• Pervasive solar PV, and batteries in the future

• New business models around a connected customer experience

• Overhaul of business processes

Opportunities from changes in technology and customer mindset


Unprecedented government intervention

• Addressing energy affordability requires a whole of industry response

• ACCC noted key drivers of electricity price increases:– Network (38%), wholesale (27%), green schemes (15%), retail costs (8%) and

retail margin (13%)1

• Lack of policy consistency from successive Governments has been a major factor

• Current Government is focused on retail – cherry picking from ACCC recommendations

• We oppose the draft legislation put before Parliament this week:– Increases investment risk in generation and may drive up prices for customers– “Big stick” divestiture powers are contrary to the ACCC recommendations– We are actively advocating against this draft legislation

• Pre-tax returns on capital employed from our Energy Markets business over the past 5 years have averaged 9.7%. Returns at this level when coupled with an uncertain regulatory environment make justifying further investment challenging

• Appropriate return on investment in the energy sector is a necessary prerequisite to the ongoing reinvestment in generating capacity in Australia

1) Source: ACCC, based on c/KWh


Challenging regulatory environment

Reference Price • Supportive - actively working on an industry-led comparison rate

Default Market Offer • Impact depends on methodology, implementation & market response

Underwriting generation • Potential to distort the market

National energy policy • No clear policy - advocating for co-ordinated energy & climate policy

Gas security policies

• Market linked to LNG netback

• APLNG is a major contributor to the domestic market


Strategy to deliver value in the future energy world

Our strategiesConnecting customers to the energy and technologies of the future

Disciplined capital management

Leading customer

experience and solutions

Low cost operator

Develop resources to

meet growing gas demand

Accelerate towards clean

energy

Employees CommunitiesCustomers Shareholders

Embrace a decentralised

and digital future

Energy Markets Integrated Gas


➢ Transform customer experience

➢ Target market leading cost position

➢ Grow new revenue streams

– Centralised Energy Services (CES)

– Solar and Storage

– Adjacencies (e.g. NBN)

– New energy solutions

Energy Markets – Retail

Simplified business centred around the customer


➢ Develop platform to connect millions of distributed assets

➢ Develop leading digital and analytics capability

– Leveraging machine learning and AI

– Optimise future decentralised portfolio

➢ Invest in technology for new customer solutions

– Connected, digitally enabled, personalised

– In front of and behind the meter

Energy Markets – Future Energy

Solar technology test site

New business models to connect distributed assets and data to customers


➢ Grow low cost renewables

➢ Increase generation flexibility

– Optimising existing fleet

– Brownfield opportunities

➢ Active management of fuel supply

Energy Markets – Energy Supply & Operations

QuarantinePower Station

Brisbane control centre

Competitive cost of energy in a changing world


➢ APLNG

– $500m cost reduction on track

– Pursue further breakeven reductions

– Invest in exploration

➢ Replicate low cost model

– Beetaloo

– Other Australian onshore exploration

Integrated Gas

Reedy Creek water treatment facility

Beetaloo Amungee well

Low cost onshore Australian producer


Transforming the business for all stakeholders

Employees

• Best ever safety performance in FY2018 (TRIFR 2.2)

• Improved employee engagement

• New Purpose, Values and Behaviours

Customers• Customer culture

• ‘Good energy’ brand launched

• Affordability – absorbing costs and helping customers that need it most

Communities• Contributing to communities in which we operate

• Targeting renewables to make up 25% of generation mix by 2020

• Committed to halving direct emissions by 2032

Shareholders• Reducing debt, improving returns

• Simplification – asset sales, APLNG upstream restructure

• Disciplined capital management


-

200

400

600

800

1,000

1,200

FY18 FY21$m

Cost to serve Generation opex LPGS&ES Future Energy CorporateLNG (Origin only)

Continuing our transformation

>$150m Origin savings targeted by FY2021➢ Simplifying the business

➢ Transforming culture

➢ >$150 million Origin-wide cost out

– Primarily retail cost to serve

– Excludes APLNG $500 million cost out

– FY2018 baseline includes $70 million legacy sites provision

– Target savings are nominal

>$150m nominal saving

1,221


Dividend update

Debt repayment continues to be prioritised until target capital structure is reached

Provided that market conditions do not materially change or the regulatory and political environment does not adversely impact operations or prospects, we expect:

FY2019 dividend

• A fully franked 20cps dividend for the 2019 financial year with a 10cps fully franked interim dividend declared in the first half of FY2019

Going forward

• A dividend policy based on a free cash flow ratio will be announced at the FY2019 full year results


Capital ManagementLawrie Tremaine


1. Resilient capital structure

2. Maximise cash & returns

through cycles

3. Disciplined capital allocation

4. Portfolio management

Financial framework and objectives

1st Quartile Total Shareholder Returns1

1) Targeting Total Shareholder Returns within the 1st quartile of the S&P/ASX-50 as stated in the 2018 Remuneration report, with reference to the Long Term Incentive Plan

2) Assuming long term oil price at US$71/bbl to US$75/bbl nominal

5 YEAR AMBITION2

Underlying ROCE≥ 10%

Underlying EPS CAGR ≥ 5%

Recommence & grow dividend


Approaching target capital structure

1) S&P: BBB-; Moody’s: Baa32) EBITDA = Underlying EBITDA adjusted to (i) exclude share of APLNG Underlying EBITDA, (ii) include cash distribution from APLNG, (iii) include

hedge premiums previously excluded from Underlying EBITDA. FY2018 represents continuing operations. Oil assumption: FY2019 Adjusted Net Debt/EBITDA includes FY2019 APLNG effective oil range of US$70/bbl to US$75/bbl

3) Gearing % = Adjusted Net Debt divided by Adjusted Net Debt + Equity

• Capital management priority:

- Investment grade credit through business cycle - target BBB/Baa2

- Provides balance sheet resilience

- Currently BBB-/Baa31 both positive outlook

• Requires:

- Adj Net Debt/EBITDA2 of 2.5-3.0x

- Gearing3 of 25 – 30%

Target (2.5 - 3.0x)

0 x

1 x

2 x

3 x

4 x

5 x

6 x

FY17 FY18 FY19

Adjusted Net Debt/EBITDA2

Target Debt/EBITDA


Optimising our debt portfolio

Our Objectives

• Reduce interest expense

• Extend tenor

• Maximum annual refinance <$1 billion

• Reduce liquidity as leverage reduces

• APLNG – lower distribution breakeven

Our achievements - Origin

FY2019 interest expense $100 million lower:

✓ Refinanced $4 billion bank debt at lower margins

✓ Redeemed €500 million ($A950 million) June-18 hybrid

✓ Liquidity reduced by $3.4 billion in FY2018

Our achievements - APLNG

APLNG refinanced US$1.4 billion project finance debt:

✓ Interest rate 2.0% lower

✓ Principal amortisation deferred (now Sept 2023 – Sept 2030)

✓ Reducing near term distribution breakeven by >US$2/boe


Optimising our debt portfolio

Plans over next 18 months

• Redeem €1.0 billion (A$1.4 billion) hybrid, ~$50 million annualised saving

• Refinance A$1 billion with new 7-10 year tenor debt

• Reduce excess liquidity by ~$0.5-1.0 billion

• Continue to shrink refinance towers

• APLNG refinance further ~US$3 billion to reduce distribution breakeven by ~US$0.50/boe

Existing Debt Portfolio

• 3 years average maturity (excluding hybrid)

• A$3.0bn committed undrawn liquidity

• Current cost of debt 5.9%

• ~50% fixed interest rate

-

500

1,000

1,500

2,000

2,500

FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026

Existing debt maturity profile ($m)

Capital Markets Debt Hybrid

Loans & Bank Guarantees - Drawn Loans & Bank Guarantees - Undrawn


Robust risk management

Opportunity to adjust risk settings as balance sheet de-levers

• Oil, FX, LNG • Only hedge as required to protect investment grade credit rating

• Natural gas, LNG trading, oil, FX• Electricity

• Hedge as required to protect margin• Hedge to manage cost of energy and risk

• Insurance • Substantial property damage insurance and business interruption program

• Interest rates• Liquidity• Credit

• Managed largely through debt instruments and currency• Adjusted as leverage reduces• Adjusted to reflect economic environment

Commodity Business

Margin Business

Catastrophic Risks

Other Financial Risks


981m

Maximising cash generation

1) Proportionate FCF = (Origin operating cash flow less capex) + (Origin share of APLNG operating cash flow less capex prior to Project Finance debt service)2) Free Cash Flow Yield based on 30 day VWAP for Origin of $6.82 per share @ 6/12/183) FY19 distribution sensitivities based on approx. US$200m per US$10/boe above breakeven guidance of US$39-44/boe; FY19 AUD/USD: 0.75

• Two strong and diversified cash generating businesses

• Double digit FCF yield achieved (proportionate basis)

• Further upside potential from APLNG

– H1 FY2019 distribution of $375 - $395 million expected

• Cost out and other mitigation will help offset Energy Markets headwinds

-2%

8%

15%

-5%

0%

5%

10%

15%

(1,500)

(1,000)

(500)

-

500

1,000

1,500

2,000

FY16 FY17 FY18

Proportionate Free Cash Flow1 and Yield2

(continuing operations)

Origin excl APLNG Origin share of APLNG

FCF Yield

-200

-

200

400

600

800

1,000

FY18US$56/bbl

FY19US$65/bbl

FY19US$70/bbl

FY19US$75/bbl

APLNG estimated distribution3 and Origin oil hedging (A$m)

APLNG Distribution Origin oil hedging


Improving returns

2.5%

4.9%

7.7%

0%

5%

10%

FY16 FY17 FY18

Underlying ROCE1 (%)

• Returns trending in the right direction

• Key drivers of growth:

- APLNG ramp up and higher commodity prices

- Eraring output step up

- Business gas sales growth

• A gap remains to > 10% aspiration

1) Adjusted to include hedge premiums previously excluded from Underlying EBITDA


Debt servicing and reduction

Sustainingcapital

Base dividend

Surplus cash returns to

shareholders

Disciplined capital allocation

• Strong expected cash generation

• Debt reduction requirement easing

• Continuing modest capital expenditure

• Provides options for funding dividends and growth

• Assess quality of growth opportunities against additional cash return to shareholders

Disciplined investment in growth


Improved Investment Decisions

GovernanceFramework

Investment Evaluation

Managing Risk

• Centralised capital allocation process• Ranked on returns, risk and strategic fit• Independent validation of economics

• Periodic assessment of external environment• Economic assumptions set independent to decisions• Standardised DCF methodology• Investment hurdle for each business based on risks

• Emphasis on downside cases• Target positive NPV for independent downside assumptions• Worst case assessment


Capital Investment Pipeline

Moderate ongoing capex demands at <$500m

Mandatory • Power of Choice• Ironbark permit commitments

Sustain• Generation maintenance• LPG• Solar and Energy Services

Committed Growth

• Digitisation• Beetaloo – stage 2 E&A two horizontal wells• QPS repower (unit 1)

~$50m

~$250m

~$150m

Estimated annual spend

Future increases in growth capex subject to project maturation

Growth Projects

• Beetaloo – stage 3 E&A subject to stage 2 results from 2020/211

• Shoalhaven expansion – FID subject to feasibility analysis• Future energy investments

FY2019 Project examples

1) Subject to Northern Territory approvals


Continual assessment of portfolio

• Successful asset sale programme. Net proceeds $3.8 billion - Contact Energy, Lattice Energy, Acumen and other infrastructure assets.

• Progressing potential divestment of Ironbark

• Ongoing assessment of portfolio:

– Ability to add value to existing assets

– Growth potential of asset

– Extent to which asset value is reflected in share price


Integrated GasMark Schubert


On track to meet commitments

In the past IG today

Organisationalstructure

Functional structure ➔

Asset structure

Process improvement

Complex process framework

➔13 coreprocesses

Operating capability

Project & constructionapproach

➔

Lean & agile, owners’ mindset

Metric Baseline FY18 Actual

June 2019Run Rate

Cost per Well1

A $/well 2.4 1.9 1.2

Operated opex2

A $/GJ 1.3 1.2 1.0

Total Capex + Opex A $bn 3.3 2.8 <2.8

Operating BreakevenUS $/boe3

30 21 <24

Distribution BreakevenUS $/boe3

48 39 <40

1) Standard unfracked vertical Surat well2) Excludes pipelines and major turnaround maintenance3) AUD:USD 0.75

Financial commitmentsAchieving a step change reduction in cost and breakeven

Operational commitmentsDelivering an aligned & simplified organisation, with streamlined processes


2.4

1.9

1.3 1.21.1 1.15

FY2018Baseline

FY2018(Actual)

Run Rate(Current)

June 2019(Estimate)

June 2019(Estimate)

CompetitiveBenchmark

Standard vertical unfracked Surat well (A$m/well)

Cost base Pre development costs

Cost per well target on track

FY2018 Actual Capital expenditure breakdown %

Operated sustain

Exploration &appraisal

Operated SIB

Downstream

Non-operated

1

1) Operated sustain capex comprises cost per well, fracking and infrastructure costs 2) Excludes pre development costs (e.g. land access)3) Source: Origin analysis4) Run rate is the cost to plan, drill, complete and connect a well.

Cost per well savings delivered through:

• Implemented smaller, leaner Asset-led model

• Simplified well design approach

• Competitive tenders for rig and gathering contracts

• Improved execution efficiencies

2 2,34


1.31.2

1.11.0

1.1

FY2018Baseline

FY2018(Actual)

Run Rate(Current)

June 2019(Estimate)

CompetitveBenchmark

Operating cost (A$/GJ)

Operating cost target on track

FY2018 Actual Operating costs breakdown %

Operated opex

APLNG corporate opex

Purchases

Downstream opex

Royalties & tariffs

Non-operated opex

Other

1

Operating cost savings delivered through:

• Implemented smaller, leaner Asset Led model

• Reduced electricity cost through recontracting

• Streamlined maintenance activities

• Reduced supporting infrastructure such as civils, security, vehicles and camps

1) $/GJ operating cost excludes pipeline and major turnaround maintenance costs which are included in operated opex2) Source: Origin analysis

2

1


Sustainable $500m p.a. cost out on track

• On track for a $2.8 billion run rate including benefit from well and operating cost savings

• Actual cost base may vary year to year due to a number of factors including

− royalties− gas purchases− scope of E&A and development

(e.g. number of wells); and− major shutdown maintenance

(upstream and downstream)


Improving prices

0

2

4

6

FY17 FY18 Q1FY19

Average realisedDomestic Gas Price

(A$/GJ)

0

2

4

6

8

10

FY17 FY18 Q1FY19

Average realisedLNG Price

(US$/mmbtu)


Production ramped up to stable operations

APLNG Asset Structure

Spring Gully & Denison

• Thick coal seams, horizontal drilling• Horizontal wells producing on average > 2x vertical wells

Reedy Creek, Combabula & Peat

• Various coal formations requiring tailored technologies• FY2019 development focus

Condabri, Talinga & Orana

• Strong production from high permeability coals• Focus on optimisation and new development opportunities

to further increase production

Non-operated asset

• Production ~2/3 QGC, ~1/3 GLNG• GLNG developments imminent (Roma East and Arcadia)

1) Equity share

-

500

1,000

1,500

2,000

APLNG Asset Production (TJ/d)

Spring Gully & Denison Reedy Creek, Combabula & Peat

Condabri, Talinga & Orana Non-Operated

1

1

Orana Gas Processing Facility


Connecting supply to processing capacity

• Connecting excess supply in existing fields to processing capacity

• Large bore pipeline infrastructure ~2-3x more capital efficient than constructing a new gas processing facility. Recent examples

− TCIP pipeline: Talinga to Condabri

− ERIC pipeline: Reedy Creek to Eurombah Creek (part of Spring Gully asset)

Processing capacity

Processing capacity TCIP

Diameter: 800mmLength: 15kmCapacity: 95 TJ/dayOnline: May 2016

ERIC

Diameter: 900mmLength: 46kmCapacity: 100 TJ/dayUnder construction

Installation of ERIC - laying 900mm polypipe


0

5,000

10,000

15,000

20,000

Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18

Net

PJ

APLNG Reserves Position

3P

2P

1P

Production

Stable reserves base since FID

• Current gas production higher than FID assumption indicating robust reservoir and facilities performance

• 1P continues to grow due to ongoing development drilling

• Steady trend of reserves converging towards 3P

1) Reserves are 100% APLNG as reported in FY2018 Reserves Report released to the ASX on 16 August 2018.2) Origin is not aware of any new information or data that materially affects the information included in the FY2018 Reserves Report released to the

ASX on 16 August 2018 and all material assumptions and technical parameters underpinning these estimates continue to apply and have not materially changed.

3) Some of APLNG’s CSG reserves and resources are subject to reversionary rights and ongoing interest in favour of Tri-Star. Refer to section 6 of the Operating and Financial Review released to the ASX on 16 August 2018 for further information.


Focus on maturing new resources

Westgrove 9• Deep conventional exploration play• Currently being drilled

Peat Flank• 3D Seismic currently being acquired• Two pilots commissioned, third on

track for FY2019

South Burunga 2• Deep conventional exploration play• Drilling complete - gas column

identified, expect to stimulate and test in 2019

East Bowen Deep• Drilling two pilots on track for FY2019

as follow up to FY2017 exploration

Reid’s Dome Spring Gully flank• Three pilots commissioned• 3D Seismic planned for early FY2020

Reid’s Dome Denison• Planning for FY2020 activity

FY2019/FY2020 - testing six plays


APLNG Commercial update

• Signed a long term infrastructure sharing agreement with QGC and an oil-linked gas

purchase of up to 350PJ (2024-2034)

• Refinanced US$1.4 billion project debt (reducing distribution breakeven by >US$2/boe)

• An APLNG buyer has elected to defer delivery of 30 cargoes over 6 years (2019 – 2024).

The buyer will pay for the deferred cargoes and APLNG expects to re-sell the associated

gas and deliver the deferred cargoes after 2024

• No material change to status of Tri-Star proceedings


3.0

4.5

3.4

0.5

1.8

0.8

0.0

1.0

2.0

3.0

4.0

5.0

6.0

HenryHub

Var.OPEX

ShippingUS to Asia

ShippingGlastone to Asia

US BenchmarkFOB Gladstone

SRMC

FY2019 GuidanceMidpointOperatingBreakeven

US$

/mm

btu

Cost competitive with US shale into Asia

APLNG operating breakeven already

competitive

Freight advantage over US shale gas is approximately US$1/mmbtu

115% Henry Hub

US$/b

oe

Source: ‘Prices and crisis: LNG and Australia’s East Coast gas market’ - Oxford Institute for Energy Studies, Origin analysis

10

20

30


Beetaloo – a multi decade opportunity to scale the low cost operating model

Facts:

• 70% interest in 18,500km2 permit

• Four, stacked, unconventional hydrocarbons plays identified

• Booked 6.6 TCF contingent resource relating to Velkerri B shale dry gas play

Dry season CY2019 activity:

• Enter Stage 2 appraisal targeting

− Kyalla shale liquids rich gas

− Velkerri shale liquids rich gas

• Two horizontal appraisal wells to be drilled and fracture stimulated

Measured and Estimated Parameters Units Best Estimate3

P50 area (from Contingent Resource area distribution) km2 1,968

Original Gas In Place (OGIP)1 (Gross) TCF 61.0

2C Contingent Resource (Gross) TCF 6.6

2C Contingent Resource (Net to Origin)2 TCF 4.6

1) OGIP presented is the product of the P50 Area by the P50 OGIP per km2.2) Net to Origin’s 70% interest in EP76, EP98, and EP117.3) Origin is not aware of any new information or data that materially affects the information included in the announcement to the ASX on 15 February 2017 and all material assumptions and technical parameters underpinning these estimates continue to apply and have not materially changed.


Beetaloo - multiple stacked plays increases chance of success

CY19 Velkerri Shale Play1

CY19 Kyalla Shale Play1

1) Well locations are illustrative only


Beetaloo plan – focus on highest value plays

CY2018 CY2019 CY2020 CY2021

Moratorium

Further Development

Subject to Northern Territory approvals

EPT1

EPT1

Stage 2 E&A Velkerri liquids rich play wellKyalla liquids rich play well

Stage 3 E&A(two horizontal wells –

target depends on Stage 2)

1) Extended production test


Looking to the future

APLNG• Pursuing further reductions in distribution breakeven to target

~US$35/boe via further cost outs and productivity improvements

Growth assets

• Replicating and scaling the low-cost model

− Beetaloo - targeting two independent liquids rich gas plays

− Other Australian onshore exploration

Connecting with

high growth Asian

LNG markets

• 20 year contract with Cameron LNG to buy 0.25 mtpa

commences FY20201

• Commenced contract to supply ENN 0.28 mtpa for five years

1) Timing dependent on the commissioning of the Cameron LNG facility


Retail

Jon Briskin


Retail overview

Market dynamics and progress

• Market remains highly competitive

• Successfully managing share and value

• Improving customer experience

• Growing Centralised Energy Services (CES), Solar and Broadband

Regulation• Addressing customer affordability

• Implications of a default offer

Customer strategy

• Transform customer experience

• Target market leading cost position

• Grow new revenue streams


Managing share and value

Electricity and Natural Gas % Churn

Source: AEMO, Origin internal analysis

• CES customers up 7%

• Growing share of Residential Solar

• #1 in Business Solar4

• Launched Origin NBN

Digital Service Interactions (weekly)

Successfully managing share and value

Improving customer experience with digital

investment

Growing CES, Solar and Broadband

• #1 for Quality Service1

• #1 for SME satisfaction2

• Top 5 most trusted energy retailer3

• Customer lifetime value approach to attract and retain

125K147K 157K

Oct 16 Oct-17 Oct-18

CES Customers

29…

28…

31-…

30…

31-…

30…

31-…

31-…

30…

31-…

Digital interactionsService call volume

Jan-18 Oct-18

85%

-20%

5%

10%

15%

20%

25%

30%

Oct

-16

Dec

-16

Feb

-17

Ap

r-17

Jun-

17

Aug

-17

Oct

-17

Dec

-17

Feb

-18

Ap

r-18

Jun-

18

Aug

-18

Oct

-18

Market Churn Origin Churn

6%8%

1) Source: Readers Digest Quality Service Awards 20192) Source: Canstar Blue SME customer satisfaction survey 20183) Source: Roy Morgan net trust survey 20184) Source: SunWiz November 2018


Addressing customer affordability

• From 1 Jan 2018:– 26% discount to VIC concession customers (standing and non-discounted offers) – 17% discount to other VIC customers (standing and non-discounted offers)– Low rate concession offers in SA

• From 1 July 2018: – Lowered electricity prices in QLD and SA– Absorbed an expected 3% price rise in NSW ($80 million pre-tax impact)

• From 1 January 2019:– Prices flat in VIC and 2018 price relief continues into 2019– 10% discount to concession customers on standing and non-discounted offers in

NSW, ACT, QLD, SA▪ Average annual savings of $169 for >230K customers

• Other initiatives: – No increases for Hardship customers since 2016– Transparency (Savernator, Usage Buster)


Implications of a Default Market Offer

AER Pricing methodology

• Yet to determine default prices by region and network patch

• Initial proposal: Top-down approach based on a range between

– the median of current standing offers; and

– the median of current market offers

• Bottom-up approach to be explored for future years

– QCA model: Market cost of energy and allowances for retail

Implementation• Default price applied such that no customer is paying more; and/or

• Reference price by which offers can be easily compared


1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

2,600

2,800

NSW QLD VIC SA

Origin range AER midpoint AER median standing offer

Potential impacts of a Default Market Offer

Estimated annual bill – Residential ($)

1) Represents average range offered by Origin in the state, and the average Australian Energy Regulator midpoint of multiple networks.2) AER midpoint = Midpoint of the median standing offer to the median market offer available in the market. Note: The AER are yet to determine the DMO price

Source: Energy Made Easy as at 12-13 November 2019, Origin analysis based on average Origin residential/SME customer single use tariff

1 1

2

• Origin has ~2.4 million residential customers

• Indicative impact of $60 million pre-tax for residential customers (based on customers above the AER midpoint)

– ~25% customers currently paying on average $102 above the AER midpoint (11% standing offer, 14% market offer)

• Indicative impact of $60 million pre-tax for SME customers based on similar methodology

• Overall net impacts dependent on:

– AER default pricing determination; and

– Level of customer activity and competition


Maintain churn differential to market

• Simpler offers

• Streamlined customer journeys

• Effortless digital experience

Targeting >$100m cost out by FY2021

• Digitising operations and customer interactions

• Product and customer journey re-design

New revenue streams

• Centralised Energy Services (CES)

• Solar and Storage

• Adjacencies

• New energy solutions

Step change in our Retail business

Simplified organisation driven by a customer and digital first mindset

Transform customer

experience

Target market leading cost

position

Grow new revenue streams


Moving to a simplified & digitised organisation

Products

Channels

Operations

Capabilities

• Multiple offers and price points

• Few simple offers• Bundle benefits

Today Tomorrow FY2021

• Digital interactions increasing

• Product campaigns• ~8% third party channels

• Digital interactions dominant• Brand + campaigns + targeted

marketing• Reduced third party channels

• Outsourced processing

• Strong operations

• Automated processes• Simple products and

customer journeys• Extend outsourcing

• Customer Lifetime Value management

• Strong new brand

• #1 Brand• Data and analytics• Digital interactions


Investment in customer experience to maintain churn differential

Simpler offers Streamlined journeys Digitising customer interactions

• Low rates expressed in dollars

• Benefits for bundling

• Payment flexibility

• Removing customer pain points

• Digitally-led

• Helping customers stay in control

• Self-serve with rich online information

• Seamless App experience

• Personalised using analytics and customer knowledge

Digitally-led customer journeys

Powerful

usage

insights

Always-on

support

Simple

&

Flexible

Best

rate

Choose when you pay

Bundle & Save

Solar &

StorageNBN…

LPGGas

Weekly cost to run your appliances

origin.com.au/efficiency

Rich usage insights and

recommendations

Helping customers stay in

control

Images are illustrative only

Hey James, looks like your

fridge is using more power

than usual, click here for

some handy tips

Hey James, here is your

personal solar solution

Here is your

house with

the system

we

recommend

Advantage range

system

Pay $XX

per month

for your

Solar

system and

electricity

Personalised solutions

Sign me up!

You could save up to $xx

by installing a battery

Good Energy brand

Currently spending $1 per hour

Gen

erat

ing

W

Exp

ort

ing

W

Importing W

Ch

argi

ng

W

Consuming WConsuming W

Ch

argi

ng

W

Today’s usage profile


124

46

FY18 FY21 Target

Cost to maintain Cost to acquire Target

Lowering cost to serve

($171/cust)

• Reduction in labour

− Journey redesign

− Shift to digital

− Automate processes

− Outsource where appropriate

• Reduction in support costs

− Improve ways of working

− Property and technology

− Procurement benefits

• Reduction in bad debt

• Targeted marketing

• Optimise channel spend

• Normal competitive market conditions

Targeting >$100m cost reduction by FY2021

(<$145/cust)

Includes corporate overheads

Energy Markets – Cost to serve


Centralised Energy

Services

Solar

and StorageAdjacencies

• Integrated energy solutions for high-rise developments

• Scale benefits• 157k residential customers• Strong growth and pipeline

• Opportunity to engage beyond the meter

• Strong market growth in Solar

• New trials: VIC VPP, Melbourne office battery

• Evolving customer value proposition

• Low investment with existing customer base

• 2.5K Origin-branded NBN sales to date

New solutions and new markets

• Technology pipeline• Deploying future energy solutions – energy disaggregation,

demand and device management• 10k WA mass market gas customers

Grow new revenue streams

125K 147K 157K

Oct-16 Oct-17 Oct-18

CES Customers MW Installed

Up to Oct-18

2.5K

Origin Broadband Sales

1221 275

16 19

LTM Oct-16 LTM Oct-17 LTM Oct-18Residential Business


Energy Supply & OperationsGreg Jarvis


50

100

150

Jul-

17

Nov

-17

Mar

-18

Jul-

18

Nov

-18

Mar

-19

Jul-

19

Nov

-19

Mar

-20

Jul-

20

Nov

-20

QLD NSW VIC SA

Australian market transitioning quickly

Source: AEMO

Renewables growing

Renewable capacity (GW)

0

10

20

30

40

50

60

70

80

Wind Solar Distributed Solar

16

18

20

22

24

26

28

0:00 6:00 12:00 18:00

Hour of day

2010 2014 2018

Opportunity for flexible capacity

Source: AEMO (July-Sep)

Average NEM demand (GW)

Rooftop solar changing NEM demand

Lower forward prices

Electricity (A$/MWh)

Rooftop solar changing NEM demand

Average NEM demand (GW)

• As renewable energy grows and coal plants retire, dispatchable energy is required to ensure reliability

• Our flexible generation portfolio is a competitive strength in this environment

Source: AEMO


Energy Supply and Operations overview

Renewables• 580MW of new contracted solar capacity online by Q1 2019

• 530MW of new contracted wind capacity expected online in 2020

Generation flexibility

• Australia’s largest gas-fired fleet (substantial firming capacity)

• Optimising existing fleet to support higher renewable penetration

• Opportunities to increase flexibility – cautious approach to investment

Fuel flexibility

• Competitive gas supply (length, cost and transport flexibility)

• Gas storage options

• Coal supply flexibility

Cautious approach to investment in the current regulatory environment


The right portfolio for a changing market

Low High

High Strategy: Short energy, Long capacity Strategy: Long energy, Long capacity

Strategy: Short energy, balanced capacity Strategy: Long energy, balanced capacity

Energy price

Volatility

Coal capacity factor

OCGT capacity factor

2018

2017

2010

2008

Dominant conditions since 2000

• Depending on market conditions, our portfolio allows us to:

− reduce generation and buy from the pool during periods of lower wholesale prices

− change the mix of hedge contracts from swaps to caps (energy vs capacity)

− increase generation to manage exposure to higher wholesale prices

− direct gas either to generation or to the wholesale gas market

Expected future stateOrigin portfolio


0

2,000

4,000

6,000

8,000

10,000

Peak Demand Capacity

Retail Business Coal Other Gas Hedge Contracts

MW

Capacity position• ~9,000 MW of exposure to peak prices

($14,500/MWh) if unhedged

• We manage this exposure through physical generation and hedge (swap and cap) contracts

• Cap contracts allow us to purchase energy when prices are low whilst providing ‘insurance’ against extreme high prices

• We expect cost of hedge contracts to reduce over the next five years driven by:

– Retail load lower now than when existing contracts were entered into

– Potential transmission upgrades providing the ability to rely more on our physical portfolio

– Developments in demand response and batteries that will help manage peaks at increasingly lower cost

Covered for peak demand


Retail (annual

price changes)

Business (recontract

over 1-3 years)

Renewables

Coal (Eraring)

Gas

Other

Swap contracts

Short position

NSW

QLD

VIC

SA

0

5

10

15

20

25

30

35

40

FY18 Sales FY18 Sales FY18 Production

Flexible energy position in a changing market

Flexible energy position

Hedging matching customer contracts

Exposure managed via peakers and cap products

Generation more than covers retail sales. Wholesale prices reflected in retail tariffs

TWh

• Able to flex the short energy position via generation and hedging

• Generation is able to cover retail load

• When energy prices rise, we rebalance the portfolio by running generation harder and having less caps and more swaps in the mix

• Lower wholesale electricity prices reduce generation earnings

– As forward prices fall, we expect total cost of energy to also fall, albeit at a slower rate given a largely fixed price generation position of ~15-20TWh


Long term PPAs underpin LREC requirements

Origin’s LREC position

• Fixed price LREC position from PPAs and contracts more than covers retail load requirement

• Remaining LREC obligation with C&I customers is a cost pass through

• Lower prices for large scale renewable certificates will reduce earnings, with a relatively fixed cost of ~4-5 million LREC certificates

Bundled PPA prices ($)(Large scale wind and solar)

Num

ber

of L

REC

s (m

illio

ns)

Source: Origin and publicly released third party data

-

40

80

120

160

-

2

4

6

8

Thou

sand

s

Legacy & Contracts Recent solar dealsStockyard Hill Origin Demand (certificates)Retail demand


Indicative SRMC Pool Price

Solar changing the shape of daily demand

Average day in the future NEM

Increased solar generation creates downward pressure on prices during the middle of the day

Evening peak provides opportunity for flexible capacity

Strategy• Minimise generation• Buy from the pool• Opportunity for storage

Strategy• Maximise generation• Maximise storage output

Our fleet is adaptable to the changing market conditions

We have investment options but are cautious in the current policy environment


Shoalhaven feasibility study

Current operations

• Located 150km south west of Sydney

• 240MW (two units at both Kangaroo Valley and Bendeela)

– Zero to full load within 15 minutes

– Bendeela capable of 40MW in three minutes

• Able to run for 28 hours before pumping water back up

Option to nearly double capacity

• ~235MW of additional pump storage generation

• Underground station utilising the entire water head

available from the Fitzroy Falls Reservoir

• Key infrastructure already established:

– Pipeline easements

– Existing switch and transmission lines

– No new water storage or dams required

Fast start pump hydro – ideally suited to changing markets


Short term shutdown and restart

Potential to operate Eraring more flexibly

MW

• Exploring ability for Eraring to ramp up and down to intra-day price movements caused by solar

• Opportunity for units to be shutdown on a short term basis:

– Savings from optimising exposure to peak periods

– Potential to push out hours-based maintenance capex

Short term shutdown and restart

0

1,200

2,000

2,800

Current min generation

Ramp down Ramp up

Area of opportunity


Changing DDPS, freeing up gas

• Darling Downs Power Station (DDPS) has historically operated as a combined cycle power station, running base load operations

• Origin has invested in flexibility to allow DDPS to operate as a peaking generator (open cycle mode) • With increasing solar penetration, this provides Origin with opportunity to:

— Run DDPS generation when demand is high— Freeing up gas to meet demand in other parts of Origin’s network

0

20

40

60

80

100

120

140

160

180

0

2

4

6

8

10

12

01/10/2018 06/10/2018 11/10/2018 16/10/2018 21/10/2018 26/10/2018 31/10/2018 05/11/2018 10/11/2018 15/11/2018 20/11/2018 25/11/2018

DDPS Volume (GWh) QLD Price ($/MWh)

GW

h$/M

Wh

Darling Downs Power Station (DDPS) volume and price


Our gas portfolio is a competitive strength

• Strength of portfolio has enabled us to grow Business sales and monetise gas through generation• Flexibility enables Origin to swing gas to the highest value market and optimise seasonality• No market repricing until FY2021

Energy Markets East Coast Gas Supply Portfolio

Movement of gas

SWQP

Wallumbilla

Moomba

0

50

100

150

200

250

300

FY18 FY19 FY20 FY21 FY22 FY23

PJ

APLNG purchase Fixed price (other)

Oil linked Market/Price review


Click here to access our virtual tour of the portfolio

Virtual tour of the portfolio

• As renewable penetration increases and coal generation plants retire the electricity market needs reliable flexible dispatchable generation

• Origin has a range of generation and storage development opportunities but is cautious on investment in the current regulatory environment

https://youtu.be/jN_lGlrSyms




Wrap upFrank Calabria


FY2019 guidance re-affirmed

Provided that market conditions do not materially change or the regulatory and political environment does not adversely impact operations:

Energy Markets

• Underlying EBITDA of $1,500-1,600 million

APLNG (100%)

• Production range of 660-690 PJ

• 250-300 operated wells drilled

• Targeting operating breakeven of US$22-26/boe1 and distribution breakeven of US$39-44/boe1

Corporate/Other

• Costs of $60-65 million

• Capital expenditure (ex-APLNG) of $385-445 million

• LNG hedging cost of $75-85 million1 at current market prices

• Oil hedging cost of $145 million1

(including premiums) at an average lagged oil price above US$75/bbl

1) AUD/USD: 0.75

Origin expects Underlying Profit to be higher and further debt reduction in FY2019


Wrap up

➢ A simplified, more resilient organisation

➢ Two strong and diversified cash generating businesses

– Further upside potential in Integrated Gas

– Addressing headwinds and transforming Energy Markets

➢ Reducing costs and improving returns

➢ Disciplined approach to investing for growth, balanced with shareholder distributions


Appendix


APLNG is a strong and aligned joint venturebetween Origin, ConocoPhillips and Sinopec

APLNG is underpinned by:

Strong reserves1,3

Quality assets

Leading operators

Aligned shareholders

Strong offtake contracts with creditworthy customers

1) Refer to the Important Notices section for more information on reserves and resources. Refer to SPE PRMS 2007 for classification and categorisation guidelines for reserves and contingent resource estimates. Reserves balance as at 30 June 2018.

2) SIPC, being Sinopec International Petroleum Exploration and Production Corporation (“SIPC”), is owned 30% by Sinopec Group, 30% by China Reform Holdings Corporation (“CRHC”) and 40% by China Chengtong Holdings Group (“CCHG”). CRHC and CCHG are Chinese central government-owned investment companies, to whom Sinopec Group transferred 70% of its ownership in SIPC in 2016 (40% to CCHG and 30% to CRHC).

3) Some of APLNG’s CSG reserves and resources are subject to reversionary rights and ongoing interest in favour of Tri-Star. Refer to section 6 of the Operating and Financial Review released to ASX on 16 August 2018 for further information.

13,310 PJ

~1 mtpa contracted until 2035

A3/Stable (Moody’s) A+/Stable (S&P), A1/Stable (Moody’s)

~7.6 mtpa contracted until 2035

Upstream Operator Downstream Operator

37.5% 37.5% 25%

(SIPC)2


$30

$50

$70

$90

$110

$130

A$/

MW

h

F17 Swap F17 Average F18 Swap F18 AverageF19 Swap F19 Average F20 Swap F20 Average

Electricity forward price by state

NSW forward baseload energy prices

Source: AEMO

Qld forward baseload energy prices

Vic forward baseload energy prices SA forward baseload energy prices

$30

$50

$70

$90

$110

$130

A$/

MW

h

F17 Swap F17 Average F18 Swap F18 Average


$30

$50

$70

$90

$110

$130

A$/

MW

h



$30

$50

$70

$90

$110

$130

$150

A$/

MW

h

F17 Swap F17 Average F18 Swap F18 AverageF19 Swap F19 Average F20 Swap F20 Average


40

45

50

55

60

65

70

75

80

85

90

40 45 50 55 60 65 70 75 80 85 90

Eff

ectiv

e oi

l pric

e (U

S$/b

bl)

FY20 average market oil price (US$/bbl)

FY20 effective price

FY20 effective price after hedging

Oil price risk management

• 11.6 mmbbl hedged - average floor of U$48/bbl

• Sold 4.2 mmbbl call options at US$85/bbl

• Hedge premium cost of $26 million

FY2019 oil hedging payoff

• 15.4 mmbbl hedged - combination of put and call options, collars and three-way producer hedges

• Hedge premium cost of $34 million

• Full participation above US$75/bbl

1) All prices are in JCC crude oil equivalent. Effective price is inclusive of contract pricing lags, hedging gains (losses) and premium costs.

FY2020 oil hedging payoff

1 1

Objective is to protect investment grade rating

40

45

50

55

60

65

70

75

80

85

90

40 45 50 55 60 65 70 75 80 85 90

Eff

ectiv

e oi

l pric

e (U

S$/b

bl)

FY19 average market oil price (US$/bbl)

FY19 effective priceFY19 effective price after hedging

1


Ironbark

• 100% owned Queensland CSG resource, adjacent to APLNG and QGC infrastructure

• Ironbark is ideally located to supply to the east coast domestic market via the Wallumbilla Hub

• Running a dual process:

− Entered FEED for Stage 1 development

− Progressing potential divestment

Ironbark 30 June 18 (PJ)

2P reserves 129

3P Reserves 192

2C Resource 288

1) Refer to the Important Notices section for more information on reserves and resources. Refer to SPE PRMS 2007 for classification and categorisation guidelines for reserves and contingent resource estimates. Reserves balance as at 30 June 2018.

2) Origin is not aware of any new information or data that materially affects the information included in the FY2018 Reserves Report released to the ASX on 16 August 2018 and all material assumptions and technical parameters underpinning these estimates continue to apply and have not materially changed.


Glossary – Financial Terms

Term Meaning

Adjusted Net Debt Net Debt adjusted to remove fair value adjustments on hedged borrowings.

CAGR Compound Annual Growth Rate.

CPS Cents per share

EPS Earnings per share

Free Cash Flow Net cash from operating activities less capital expenditure.

Gearing Adjusted Net Debt / Adjusted Net Debt + Total equity

Underlying EPS Underling Earnings per share - Underlying profit/loss divided by weighted average number of shares.

Underlying EBITDA Underlying earnings before underlying interest, underlying tax, underlying depreciation and amortisation (EBITDA) as disclosed in note A1 of the Origin Consolidated Financial Statements for the year ended 30 June 2018.

Underlying ROCE Underlying ROCE is calculated as Adjusted EBIT / Average Capital Employed. Average Capital Employed = Shareholders Equity + Origin Debt + Origin’s Share of APLNG project finance - Non-cash fair value uplift + net derivative liabilities. The average is a simple average of opening and closing in any year. Adjusted EBIT = Origin Underlying EBIT and Origin’s share of APLNG Underlying EBIT + Dilution Adjustment = Statutory Origin EBITadjusted to remove the following items: a) Items excluded from underlying earnings; b) Origin’s share of APLNG underlying interest and tax; and c) the depreciation of the Non-cash fair value uplift adjustment.

VWAP Volume Weighted Average Price


Glossary – Non-Financial Terms

Term Meaning

1P Proved Reserves are those reserves which analysis of geological and engineering data can be estimated with reasonable certainty to be commercially recoverable. There should be at least a 90 per cent probability that the quantities actually recovered will equal or exceed the estimate.

2P The sum of Proved plus Probable Reserves. Probable Reserves are those additional reserves which analysis of geological and engineering data indicate are less likely to be recovered than Proved Reserves but more certain than Possible Reserves. There should be at least a 50 per cent possibility that the quantities actually recovered will equal or exceed the best estimate of Proved plus Probable Reserves (2P).

3P Proved plus Probable plus Possible Reserves. Possible Reserves are those additional Reserves which analysis of geological and engineering data suggest are less likely to be recoverable than Probable Reserves. The total quantities ultimately recovered from the project have at least a 10 per cent probability of exceeding the sum of Proved plus Probable plus Possible (3P), which is equivalent to the high estimate scenario.

2C The best estimate quantity of petroleum estimated to be potentially recoverable from known accumulations by application of development oil and gas projects, but which are not currently considered to be commercially recoverable due to one or more contingencies. The total quantities ultimately recovered from the project have at least a 50 per cent probability to equal or exceed the best estimate for 2C contingent resources.

ACCC Australian Competition and Consumer CommissionAEMO Australian Energy Market OperatorAER Australian Energy RegulatorAI Artificial IntelligenceAPLNG A reference to Australia Pacific LNG or APLNG is a reference to Australia Pacific LNG Pty Limited (and its related entities), an incorporated

Joint Venture between Origin, ConocoPhillips and Sinopec in which Origin holds a 37.5% shareholding. Origin’s shareholding in Australia Pacific LNG is equity accounted

Bbl Barrel – An international measure of oil production. 1 barrel = 159 litresBcm Billion cubic metres of natural gasBoe Barrel of oil equivalentBtoe Billion tonnes of oil equivalentc/KWh Cents per kilowatt hourCapacity factor A generation plant’s output over a period compared with the expected maximum output from the plant in the period based on 100 per cent

availability at the manufacturer’s operating specifications.CES Centralised Energy ServicesCSG Coal seam gasDCF Discounted Cash FlowDDPS Darling Downs Power StationDMO Default Market OfferE&A Exploration and appraisalFEED Front End Engineering DesignFID Final Investment Decision


Glossary – Non-Financial TermsTerm Meaning

GJ Gigajoule = 109 joulesGW Gigawatt = 109 wattsGWh Gigawatt hour = 103 megawatt hoursJCC Japan Customs-cleared CrudeLNG Liquified Natural GasLPG Liquified Petroleum GasLREC Large scale Renewable Energy CertificateLTM Last Twelve Monthsmmbbl Million barrelsmmbtu Million British thermal unitsmtpa Million tonnes per annumMW Megawatt = 106 wattsMWh Megawatt hour = 103 kilowatt hoursNBN National Broadband NetworkNEM National Electricity MarketNPV Net Present ValueOCGT Open cycle gas turbinePJ Petajoule = 1015 joulesPPA Power purchase agreementPRMS Petroleum Reserves Management SystemQCA Queensland Competition AuthorityQPS Quarantine Power StationS&ES Solar & Energy ServicesSME Small / Medium EnterpriseSPE Society of Petroleum EngineersSRMC Short run marginal costSWQP Southwest Queensland PipelineTCF Trillion cubic feeTJ/d Terajoules per day (Terajoule = 1012 Joules)TRIFR Total Recordable Incident Frequency RateTWh Terawatt hour = 109 kilowatt hoursVPP Virtual Power PlantWatt A measure of power when a one ampere of current flows under one volt of pressure.


Important Notice

Forward looking statementsThis presentation contains forward looking statements, including statements of current intention, statements of opinion and predictions as to possible future events. Such 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 objectives to change as well as risks, circumstances and events specific to the industry, countries and markets in which Origin and its related bodies corporate, joint ventures and associated undertakings operate. They also include general economic conditions, exchange rates, interest rates, regulatory environments, competitive pressures, selling price, market demand and conditions in the financial markets which may cause objectives to change or may cause outcomes not to be realised.

None of Origin Energy Limited 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. The forward looking statements in this presentation reflect views held only at the date of this presentation.

Statements about past performance are not necessarily indicative of future performance.

Except as required by applicable law or the ASX Listing Rules, the Relevant Persons disclaim any obligation or undertaking to publicly update any forward looking statements, whether as a result of new information or future events.

No offer of securities

This presentation does not constitute investment advice, or an inducement or recommendation to acquire or dispose of any securities in Origin, in any jurisdiction.


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 financial year ended 30 June 2018 (the period) compared with the financial year ended 30 June 2017 (the prior corresponding period), except where otherwise stated.

Origin’s Financial Statements for the financial year ended 30 June 2018 are presented in accordance with Australian Accounting Standards. The Segment results, which are used to measure segment performance, are disclosed in note A1 of the Financial Statements and are disclosed on a basis consistent with the information provided internally to the Chief Executive Officer. Origin’s Statutory Profit contains a number of items that when excluded provide a different perspective on the financial and operational performance of the business. Income Statement amounts presented on an underlying basis such as Underlying Consolidated Profit, are non-IFRS financial measures, and exclude the impact of these items consistent with the manner in which the Chief Executive Officer reviews the financial and operating performance of the business. Each underlying measure disclosed has been adjusted to remove the impact of these items on a consistent basis. A reconciliation and description of the items that contribute to the difference between Statutory Profit and Underlying Consolidated Profit is provided in the Operating and Financial Review.

This presentation also includes certain other non-IFRS financial measures. These non-IFRS financial measures are used internally by management to assess the performance of Origin’s business and make decisions on allocation of resources. Further information regarding the non-IFRS financial measures and other key terms used in this presentation is included in this Appendix. Non-IFRS measures have not been subject to audit or review.

Certain comparative amounts from the prior corresponding period have been re-presented to conform to the current period’s presentation.

A reference to Australia Pacific LNG or APLNG is a reference to Australia Pacific LNG Pty Limited in which Origin holds a 37.5% shareholding. Origin’s shareholding in Australia Pacific LNG is equity accounted.

A reference to $ is a reference to Australian dollars unless specifically marked otherwise.

All references to debt are a reference to interest bearing debt only. Individual items and totals are rounded to the nearest appropriate number or decimal. Some totals may not add down the page due to rounding of individual components. When calculating a percentage change, a positive or negative percentage change denotes the mathematical movement in the underlying metric, rather than a positive or a detrimental impact. Measures for which the numbers change from negative to positive, or vice versa, are labelled as not applicable.

Important Notice (cont)


ReservesDisclosures of Origin and APLNG’s reserves and resources are as at 30 June 2018. These reserves and resources were announced on 16 August 2018 in Origin’s Annual Reserves Report for the year ended 30 June 2018. Petroleum reserves and contingent resources are typically prepared by deterministic methods with support from probabilistic methods. Petroleum reserves and contingent resources are aggregated by arithmetic summation by category and as a result, proved reserves (1P reserves) may be a conservative estimate due to the portfolio effects of the arithmetic summation. Proved plus probable plus possible (3P reserves) may be an optimistic estimate due to the same aforementioned reasons.

Some of APLNG’s reserves and resources are subject to reversionary rights and an ongoing royalty interest in favour of Tri-Star. Refer to Section 6 of the Operating and Financial Review released on 16 August 2018 for furtherinformation.

Important Notice (cont)


For more information

Peter RiceGeneral Manager, Capital MarketsEmail: [email protected]: +61 2 8345 5308Mobile: + 61 417 230 306

Liam BarrySenior Manager, Investor RelationsEmail: [email protected]: +61 2 9375 5991Mobile: + 61 401 710 367

www.originenergy.com.au

mailto:[email protected]

mailto:[email protected]

Thank You

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