ORIGIN ENERGY LIMITED — Capital/Financing Update 2013

Jun 30, 2013

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To	Company Announcements Office		Facsimile	1300 135 638
Company	ASX Limited		Date	1 July 2013
From	Helen Hardy		Pages	4
Subject	ORIGIN TO ACQUIRE ERARING ENERGY AND ENTER INTO ARRANGEMENT			NEW FUEL SUPPLY

Please find attached a release on the above subject.

Regards

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Helen Hardy Company Secretary

02 8345 5023 – helen.hardy@originenergy.com.au

Origin Energy Limited ACN 000 051 696 • Level 45 Australia Square, 264-278 George Street, Sydney NSW 2000 GPO Box 5376, Sydney NSW 2001 • Telephone (02) 8345 5000 • Facsimile (02) 9252 1566 • www.originenergy.com.au

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ASX/Media Release

1 July 2013

Origin to acquire Eraring Energy and enter into new fuel supply arrangements

Origin Energy Limited (Origin) today announced it had executed a Sale and Purchase Agreement with the NSW Government to acquire Eraring Energy for a net payment of $50 million[1] and agreed the terms for cancellation of the Cobbora Coal Supply Agreement including a payment to Origin of $300 million.

In a related transaction, Origin today announced it had entered into a coal supply agreement with Centennial Coal for the provision of 24.5 million[2] tonnes of coal over an eight-year period from FY 2015 for use at Eraring Power Station.

On 1 March 2011, Origin entered into GenTrader arrangements with the State-owned entity, Eraring Energy, which included the right to dispatch and sell electricity output from the Eraring Power Station and the Shoalhaven Scheme. At the time Origin also entered into an arrangement with the State-owned entity, Cobbora Coal Mine Pty Limited, which included the supply of up to five million tonnes of coal per annum from FY 2015 to FY 2032 from the undeveloped Cobbora Coal Project.

Cancellation of the rights under the Cobbora arrangements and commencement of the supply agreement with Centennial Coal are both conditional on successful completion of the acquisition of Eraring Energy.

Origin Executive Director, Finance and Strategy, Ms Karen Moses said, “The acquisition of Eraring Energy is a natural extension of the existing relationship between Origin and Eraring Energy via the GenTrader Arrangements, and stands to deliver ongoing benefits to our business.

“Eraring Power Station and the Shoalhaven Scheme are high-quality generation assets whose combined total generation capacity represents six per cent of National Electricity Market capacity.

“This acquisition will provide Origin additional flexibility in the operation of Australia’s largest power generation portfolio, which sources electricity from both traditional and renewable resources, to provide a secure, reliable and affordable supply of energy to millions of Australians.

“Eraring Power Station is one of the most efficient and lowest carbon intensity coalfired power stations in NSW while the Shoalhaven Scheme uses pump hydro technology to generate electricity during periods of peak demand. The two assets will complement Origin’s existing NSW generation assets including the gas-fired

1 Reflects a total purchase price of $659 million net of the expected balance of prepaid capacity charges and funds on deposit with the NSW Government of $609 million at completion, which is expected in Q1 FY14. The deposit balance and pre-paid capacity charge amount reflects the remaining balance of funds for future capacity charges paid by Origin to the State when it entered the GenTrader Arrangements in March 2011.

2 Six million tonnes is conditional on the development of Centennial Coal’s Newstan mine extension project.

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Origin Energy Limited ABN 30 000 051 696 Level 45 Australia Square, 264-278 George Street, Sydney NSW 2000 GPO Box 5376, Sydney NSW 2001 Telephone (02) 8345 5000 Facsimile (02) 9252 1566 www.originenergy.com.au

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Uranquinty Power Station near Wagga Wagga and Cullerin Range Wind Farm near Goulburn.

“The net payment of $50 million to acquire Eraring Energy reflects the benefit of the additional flexibility and efficiency that ownership provides after taking into consideration the loss of potential Availability Liquidated Damages receipts available under the GenTrader Arrangements.

Eraring Energy acquisition benefits

“The acquisition of Eraring Energy will provide Origin an opportunity to leverage its existing electricity generation, portfolio asset management and energy trading capabilities with power stations that are already familiar to us via the GenTrader Arrangements.

“Direct ownership and operation of Eraring and Shoalhaven power stations will provide Origin with scale and generation flexibility benefits that were previously unavailable under the GenTrader Arrangements.

“Origin’s generation portfolio will have greater fuel flexibility, access to a larger range of generation output levels and the ability to optimise the timing and duration of planned outages to support our position as Australia’s largest energy retailer with 4.3 million customers.

“The sale of Eraring Energy represents an important next step in the ongoing reform of the New South Wales electricity sector, which will ultimately deliver better outcomes for consumers, government and industry.

Eraring Power Station coal supply arrangements

“Origin is pleased to agree terms with the NSW Government for cancellation of the rights under the Cobbora arrangements.

“Origin and Cobbora Coal Mine entered into the Cobbora Coal Supply Agreement in 2011 to provide a future fuel source for Eraring Power Station. It subsequently became clear that there were sufficient alternative coal supply arrangements which would deliver a better outcome for NSW and Origin. The State has agreed to pay Origin $300 million for the Cobbora arrangements to be cancelled.

“Under the terms of the agreement announced today with Centennial Coal, Origin will receive 24.5 million tonnes of coal from FY 2015 to FY 2022 from Centennial’s mines, several of which are located in close proximity to Eraring Power Station.

Transition arrangements

“Origin and Eraring Energy are actively working to achieve a seamless transition to the new ownership arrangements and we look forward to welcoming the company’s new employees to Origin.

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“Origin is proud of its track record of making a positive contribution to the regions in which we operate and will shortly begin engaging with the communities close to Eraring Energy’s assets,” Ms Moses said.

For further information please contact:

Media Investors Lina Melero Peter Rice General Manager, External Affairs General Manager, Capital Markets Ph: +61 2 8345 5217 Ph: +61 2 8345 5308 Mobile: +61 427 017 798 Mobile: +61 417 230 306

About Origin Energy

Origin Energy (ASX: ORG) is the leading Australian integrated energy company focused on gas and oil exploration and production, power generation and energy retailing. A member of the S&P/ASX 20 Index, the company has more than 5,800 employees and is a leading producer of gas in eastern Australia. Origin is Australia’s largest energy retailer servicing 4.3 million electricity, natural gas and LPG customer accounts and has the country’s largest and one of the most flexible generation portfolios with approximately 5,900 MW of capacity, through either owned generation or contracted rights. Origin’s strategic positioning and portfolio of assets provide flexibility, stability and significant opportunities for growth across the energy industry. Through Australia Pacific LNG, its incorporated joint venture with ConocoPhillips and Sinopec, Origin is developing one of Australia’s largest CSG to LNG projects based on Australia’s largest 2P CSG reserves base.

In New Zealand, Origin is the major shareholder in Contact Energy, the country's leading integrated energy company, operating geothermal, thermal and hydro generation facilities and servicing electricity, gas and LPG customers across both the North and South islands. Origin also operates several oil and gas projects in New Zealand and is one of the largest holders of petroleum exploration acreage in the country.

Origin has a strong focus on ensuring the sustainability of its operations, is the largest green energy retailer in Australia and has significant investments in renewable energy technologies.

For more information go to www.originenergy.com.au

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