QGC 10:08 AM Investor Presentation THE OFFER§ 100% scrip...

QGC 10:08 AM Investor Presentation

THE OFFER
§ 100% scrip takeover offer for Sydney Gas (“SGL”)
§ 1 QGC share for every 2 SGL shares held
§ Offer to fund $30 million April and June 2006 Convertible Notes
repayment at a low cost
– 6% coupon
– $0.50 face value
– Convertible on a 1-for-1 basis
– Two years to redemption
§ Conditions:
– More than 50% acceptance
– Other conditions to preserve SGL value

COMPETITIVE LANDSCAPE
Coal Seam Gas (“CSG”) has enormous growth potential
§ Growth in demand for energy
– International oil shortage – 3rd oil shock
– Steaming coal price doubled in last five years
§ Growth of gas market likely to be greatest in conversion to electricity
§ National electricity grid developing
§ Environmentally ‘cleaner’ than coal
§ Opportunities to convert to tradeable commodities
– Petrochemicals
§ CSG has material advantage over pipeline gas (eg PNG) when colocated
with electricity grid

QGC POSITION
§ Largest listed specialist CSG company in Australia
§ Largest attributable volume under firm sales contracts of specialist
CSG companies. First delivery in April 2006
§ Largest holding of Proved and Probable (2P) Reserves of specialist
CSG companies
§ Sales contracts covered by Proved (1P) Reserves

Two gas fields being developed:
– Berwyndale South (QGC 90%)
– Argyle (QGC 60%)
§ Third field (Lauren, QGC 60%) under
production testing
§ All close to Roma to Brisbane Gas
Pipeline
§ Queensland/New South Wales
electricity interconnector traverses
QGC acreage
§ Interest in more than 9,000 km2 of
tenements in Surat Basin

§ Flow rates averaging 760,000 cfd/well (approximately 0.3 PJ pa)
§ Well completion techniques underpinning gas field developments
Technical competence proven by gas field development
record
Production testing underway
at Berwyndale South

2P Reserves 470 PJ
(QGC share 336 PJ)
§ Binding minimum
contracts for 15.4 PJ pa
(QGC share 11.6 PJ
pa) for 10 years with
CS Energy, Braemar
Power Partners and
Incitec Pivot
§ Options to 22.1 PJ pa
(QGC share 17.1 PJ
pa)

STRATEGIC RATIONALE
1. Strengthens QGC’s position as Australia’s leading independent
CSG group
2. Attractive addition to QGC’s asset portfolio
3. Establishes arbitrage options by interchanging between markets:
§ Surat
§ NSW
§ Gas
§ Electricity

STRATEGIC RATIONALE
2. Attractive addition to QGC’s asset portfolio
§ Significant acreage position in New South Wales
§ Close proximity to existing gas transportation infrastructure
(e.g. Moomba-to-Sydney Pipeline)
§ Consistent gas production and sales profile since 2001
§ Valuable gas sales contract with the Australian Gas Light
Company (“AGL”)
– Ten year term with five year option
– 7.25 PJ pa (SGL share)
– Current value estimate over $300 million (SGL share)
§ SGL’s Camden project awarded State Significant Development
Status, recognised by the NSW Government as important to
the economic future of the State

WHY SGL SHAREHOLDERS SHOULD
ACCEPT THE OFFER
1. Positioning for growth and shareholder value
2. Nearly trebles equity share of 2P reserves
3. Leveraging off QGC’s proven track record of delivering
shareholder value
4. QGC has a focused and stable Board and management
5. QGC is offering a two year, low cost financing solution for the
repayment of the SGL Convertible Notes

READ PAGE 16 !!!!


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