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11 April 2017

Asia Pacific/Australia
Equity Research
Integrated Oil & Gas

Origin Energy (ORG.AX / ORG AU)
Price (11-Apr,A$) 7.46 COMMENT
Target Price (A$) 7.00
Target price ESG risk (%)
Market cap (A$mn)
Keep on running?
Yr avg. mthly trading (A$mn) 709.4
■ Outlook for Energy Markets continues to strengthen: As we discussed here,
Projected return:
Capital gain (%) -6.2 the value of Origin's flexible generation portfolio is revealing itself as the
Dividend yield (net %) 0.0 electricity market evolves from higher average prices to higher peak prices and
Total return (%) -6.2 volatility. This – and the recent strength of AGL's share price – suggests that
Target price is for 12 months. upside remains. Strictly speaking, using our DCF we estimate that ORG and AGL
Research Analysts are pricing in a similar wholesale electricity price of $70.0/MWh and $72.5/MWh,
Mark Samter respectively. However, if we modelled an electricity price in line with the 2019/20
61 2 8205 4537 forward curve of ~$80/MWh, our ORG DCF value would be $8.10/sh. ■ Market tends to carry higher valuation than us for oil & gas assets…on
Peter Wilson which basis Energy Markets looks cheaper: Whilst we feel that we model
61 2 8205 4107 APLNG and the E&P business well, it is worth noting that (admittedly skewed by
Woodside) the big 3 E&Ps trade at ~12% premium to our NPVs. We do hear from
investors that we carry a lower value for APLNG and the newly named Lattice
Energy than our competitors. Whilst we stand entirely by our valuation for the oil
& gas assets for Origin, if we assume the market is equally as disconnected from
us on their value as for the big E&P's, they would be valued ~$0.67/sh, or
~A$1.17bn, higher. On this basis, we would have the market pricing in Energy
Markets at ~9.5x FY18 EV/EBITDA versus AGL at 10.5x noting that in the past
we have argued that the Energy Markets business could justify a higher medium-
term multiple than AGL.
■ March quarter generation output points to FY17 guidance beat: A rebound in
output from the Eraring power station in the March quarter points to $50mn
EBITDA upside vs pcp and our FY17 modelled estimates. This could see Origin
at or above the top end of FY17 Energy Markets guidance of $1,450-1,500mn.
■ Value upside ever more apparent, $8.40-9.40/sh based on market comps,
maintain OUTPERFORM: In this note we make no changes to earnings or target
price of $7.00/sh. However, with market dynamics in Energy Markets continuing
to play into Origin's hands, and APLNG operationally strong (for now at least), the
optimism we hear from the market on Origin is certainly not without merit nor is
the upside tapped. Using market comparables, we estimate the value of ORG to
be worth $8.40-9.40/sh.
Total return forecast in perspective Financial and valuation metrics
Year 6/16A 6/17E 6/18E 6/19E
Production (mmboe) - - - -
Revenue (A$ mn) 11,923 12,803 13,482 13,993
EBITDAX (A$ mn) 1,635 2,540 3,515 3,906
EBIT (A$ mn) 735 1,172 1,728 2,093
- 18%
Net Income (Adj.) (A$ mn) 354 592 1,111 1,486
- 38%
EPS (Adj.) (Ac) 28.01 33.76 63.39 84.77
12mth 52 Week Hi- *Target Change from previous EPS (%) n.a. 0.0 0.0 0.0
Volatility Lo return EPS growth (Adj.) (%) (54.5) 20.5 87.8 33.7
Share Price CS Target Rtn Mean P/E (x) 26.6 22.1 11.8 8.8
Source: Company data, Thomson Reuters, IBES, Credit Dividends (Ac) 10.00 0.00 0.00 25.00
Suisse estimates Dividend yield (%) 1.3 0.0 0.0 3.4
Performance 1M 3M 12M Price/Book (x) 0.6 1.0 0.9 0.8
Absolute (%) 16.56 7.65 60.43 EV/EBITDAX (x) 13.8 8.8 5.9 4.9
Relative (%) 13.90 4.91 40.20 Net debt/equity (%) 65.2 70.1 54.3 37.6
Source: Company data, Thomson Reuters, Credit Suisse estimates

Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware
that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report
as only a single factor in making their investment decision.

5) 20.5 41.0 4.964 2.6 22.111 1. Analyst: Mark Samter Income Statement 6/16A 6/17E 6/18E 6/19E Earnings 6/16A 6/17E 6/18E 6/19E Revenue 11.8 Unusal item after tax (943) (1.1 0.8 Payables 2.945 2.6 8.052 2.7 3.9 6.788 1.898 27.753 1.753 1.6 1.8 Income tax (275) (259) (341) (431) PEG (x) (0.093 4 MSCI IVA Risk Comment: ORG could suffer a Net Interest (610) (564) (519) (408) rating downgrade on increased risk from Depr & Amort 900 1.4 Associates & Other 0 0 0 0 FCF Yield (%) 5.4 Balance Sheet 6/16A 6/17E 6/18E 6/19E Profit Margin (%) 3.612 11.212) (1.00 Ordinary equity 14.110 Return on Assets (%) 1.061 Capex (691) (509) (394) (251) Global Local Country Stock Capex .128 Intangibles 5.515 3. & Amort.0 25.172 1.16 Sep.269) 1.7 EBIT 735 1.855 2. .3 Net Debt to EBITDA (x) 5.728 2.616 9.111 1. .0 0.6 Non-current assets 25.635 2.4 84.AX / ORG AU) 2 .Maintenance (307) (239) (244) (251) Share price performance Acquistions & Invest 0 0 0 0 Asset sale proceeds 0 0 0 0 13 Other .8 8.7 2.0 12.2 2.9 103.6 12.1 Minorities (6) -0 -0 -0 EV/EBITDA (x) 13.879 6 C value the exploration assets at $524mn versus G S C G a book value of $2. 1. 7. .1 2.041 4. We Net Debt 9. plant & equip. (900) (1.7 9.484 23.909 6.107 1.9 Preferred dividends .176 1.0 0.1 11.232 Return on Invested Cap.9 1.AX S&P ASX 200 Index On 11-Apr-2017 the S&P ASX 200 Index closed at 5929.1 0.172 1.8 5.470 9.16 May.866 6.0 Associates 0 0 0 0 Dividend Payout (%) 35.161 15.8 Receivables 1.5 7.647 TP ESG Risk (%): -20.327 23.3 4.161 15.46.475 13.7 0.896) Total cashflow (8) 473 561 (85) 3 Adjustments (1) 0 0 0 May.8 Normalised NPAT 354 592 1.2 35.049 14.33/US$1 Source: Company data.240 14.2 1.3 Other 58 199 244 233 Valuation 6/16A 6/17E 6/18E 6/19E Profit before tax 635 851 1.486 EV/EBIT (x) 30.896) 7 Other financing cash in/(outflows) (8) 0 0 0 5 Financing cashflow (612) 150 (900) (1.813 2 increased scrutiny over fugitive gas emissions Tax Paid 52 0 0 (215) from its upstream coal seam gas operations.368 14. Cash Flow 6/16A 6/17E 6/18E 6/19E L MSCI IVA Risk: Negative G EBIT 735 1.048 1.368) (1. 11 April 2017 Origin Energy (ORG.3 Profit after tax 360 592 1. Target Price: A$7.9 4.225) Environment Social Governance Operating cashflow 794 1.232 1.970 Other liabilities 2.0 2.041 2.486 Price to book (x) 0.0 9.351 15.690) 150 (900) (1.690 5.0 3.5 0.923 12.813) EPS growth (%) (54. (158) (519) (519) (408) Free CFPS (c) 38. .530 13.540 3.530 13.) (c) 28.264 1.0 7.509 13.3 0.366 5.8 37.6bn.expansionary (384) (270) (150) 0 Capex .6 Cash & equivalents 146 615 1.111 1.368 1.828 12.2 10.861) 0 0 Returns 6/16A 6/17E 6/18E 6/19E Net profit (Reported) (589) (1. .093 DPS (c) 10.5 Inventories 248 175 148 153 Equity Multiplier (x) 2.4 4.681 Int Cover (EBITDA) (x) 10.404 6.2 4.16 Jan.753 EBITDA 1.0 2.572 11.917 P/E (CS) (x) 26. - Investing cashflow (190) (784) (394) (251) 11 Dividends paid (410) 0 0 0 9 Equity raised 2.0 33.091 Asset Turnover (x) 0.5 0.746 2.0 1.15 Sep.5 49.018 2.3 3.3 13.803 13.9 0.6 2.761 Capex to Sales (%) 5.546 6.8 9.571 4. 8 L Poseidon are at risk of being stranded due to Total shareholder funds 14.4 Other current assets 1.586 (%) Gearing 6/16A 6/17E 6/18E 6/19E Property.AX / ORG AU) Price (11 Apr 2017): A$7.704 2. Dividend Yield (%) 1.0 0.232 1.8 Depr.366 5.049 14.5 Other non-current assets 12.766 8. S Minority interests 21 21 21 21 Origin's gas exploration assets such as Preferred capital .109 Capex to Depr (%) 76.486 Return on Equity (%) 2. Rating: OUTPERFORM.15 Jan.2 6.1 13.647 LCS the global transition away from fossil fuels.8 63.382 23. Change in Working capital (166) (85) 71 4 0 Other cash and non-cash items (117) (784) (1.0 29.8 3.366 ND/ND+E (%) 39.035 Total liabilities 14.788) (1.366 5.496 0 0 0 Net borrowings (2.993 Equiv.4 0.0 0.906 EPS (mn) (CS adj.2 22. .1 Total assets 28. . FPO (period avg) 1.838 10 TP Risk Comment: ESG value impact: -20% .232 1. .114 MSCI IVA Rating AA Net assets 14. Credit Suisse estimates Origin Energy (ORG.5 91.3 5.728 2.8 Interest bearing debt 9.7 19.482 13.921 3.989 27.8 33.0 0.5 87.2 27.151 7.8 4.052 11.8 8.0 5.607 4.5) 1.7 6.17 Movement in cash/equivalents (9) 473 561 (85) ORG.525 27.5 Current assets 3.3 On 11-Apr-2017 the spot exchange rate was A$1.452 1.5 Net interest exp.175 Int Cover (EBIT) (x) 4.

AX / ORG AU) 3 . a volatile summer period has revealed the electricity generation market to be much tighter than expected which is compounding the effect of higher fuel costs. Despite the extremely strong position of the Energy Markets business. continues to keep us up at night too.0x premium to AGL. While we stand by our E&P and APLNG valuation. then our valuation would increase to $8.0x or 1.0x premium to AGL Source: Credit Suisse estimates Electricity futures point to further upside Upside to currently modelled long-term electricity price As we pointed out in Talkin' bout my generation: peak value.00/sh incorporates a $60/MWh long- Origin Energy (ORG.36/sh $0. mostly resting on the proposition of sustained upside from a tighter- than-expected wholesale electricity market. As obvious with our Outperform rating.67/sh of extra value versus our current Origin DCF valuation of $7. so of course are we. there is a brewing further upside case to Origin that we can get excited about.40-9. this is not a company without risk though.40/sh. Figure 1: Origin Energy upside valuation scenario $0. A US$1/bbl move in our oil deck (at all points of the curve) changes our Origin group NPV by ~1. The balance sheet. While the recent share price strength has reflected this to some extent. As shown in Figure 1 and discussed further below: if we carry Origin's oil and gas assets at the same premium to DCF as the other Australian large cap E&P's are trading then we would get $0.75/sh $0. as discussed at great length prior.0% E&P Energy Markets at Upside. we are concerned that the upside to the electricity thematic not be obscured by a below market carrying value for these. 11 April 2017 Still room to run There is little doubt that the market is taking a far more constructive mindset towards Origin than was evident 12-24 months ago.Energy Upside scenario premium AGL multiple Markets at 1.8% . we would argue that further upside exists.this is still a highly leveraged business to oil (and fundamentally unchanged by disposing Lattice Energy given the hedge). We estimate that Origin's share price is currently pricing in a long-term wholesale electricity price of ~$70/MWh which is below the 2019/20 forward price of ~$80/MWh and below our estimate of the theoretical long-term cost of new entrant renewables of ~$85/MWh once the cost of variability is included (Wind/solar variability and LT electricity prices).67/sh $7. Our current DCF valuation of $7.94/sh $9.00/sh. If we then put Origin's Energy Markets business at either a 0. despite these risks. However. Origin looks set to benefit from the next phase of the electricity price uplift thematic.00/sh Current Target Price Add mkt 12.

Interestingly.0x premium.0% per annum for AGL versus 8.5x FY18 EBITDA.80 3.7% higher 15410 Energy Markets FY18 EBITDA 1660 Implied Energy Markets EV/EBITDA 9. Market clearly more bullish on E&Ps than us Whilst we entirely stand by our valuation for both APLNG and the newly named Lattice Energy (the former NewCo within Origin). this would see the current share price implying 'just' Figure 3: Implied Energy Markets valuation if oil & gas valued 11.75 25. Let's assume for a moment that the market was applying the average 11.9% Oil Search 7.0% Santos 3.0x premium. That would see Origin's oil & gas assets worth ~A$6. In particular.60 7. However.0x to 1. For sensitivity. if we modelled an electricity price of $80/MWh. is the output from Origin's generation portfolio.AX / ORG AU) 4 . it is clear to us from the other large cap E&Ps that the market.88 2. Origin's output rebounded from an outage impacted 2Q17 to record the highest output since 1Q15. then our aggregate value for Origin would be $7. We have previously argued that this could justify a 1. as laid out below.67/sh more than we model them at. Credit Suisse estimates Clear upside if market is getting Origin oil & gas assets 'wrong' too We won't be quite arrogant enough to suggest that the market has it wrong and we are right with our NPVs for the E&Ps. on average.10 7. it could be argued that Origin's EM business should trade on somewhere between a 0.7% higher A$m Implied Energy Markets valuation with oil & gas 11. As shown in Figure 4. 11 April 2017 term price by FY20. if we carried Origin's EM business at this multiple vs our current DCF of 9.70/sh at a 1. what seems a fair argument is that if the market is pricing the big E&Ps above our NPVs it would only seem logical that they should be doing the same for APLNG and Lattice Energy.3x Source: Company data. longer duration cashflows due to the finite life of physical generation assets and the coal supply contracts that underpin them compared to retail platforms. in our view. and lower 2020s carbon policy risk. Credit Suisse estimates Generation output points to strong 2HFY17 Given that prices are largely hedged 12 months out on a rolling basis. Figure 2: Australian Large Cap E&Ps premium to CS NPV CS NPV share price Premium to CS valuation Woodside 26. A case for a higher medium-term multiple for Origin vs AGL We have previously outlined an argument for Origin to trade on a higher medium term – or 'steady-state' – multiple than AGL based on an earnings profile that is less dependent on coal-fired baseload generation.7% Source: Company data. values them materially higher than us. Given our estimated FY18-20 EBITDA growth rate of 10. lower sustaining capex intensity. output from Origin Energy (ORG.7% premium to Origin's oil and gas assets that we see in the large cap E&P's.1% for Origin's EM business. our Origin DCF value would be $8.0x EV/EBITDA multiple premium for ORG.75/sh or up to $8.1% Average 11.7x. the key input into short-term earnings for the Energy Markets business.10/sh. AGL is currently trading on 10.36/sh or ~A$0. This manifests in lower earnings volatility.80 33.

We note that the improved operation of Eraring would have been at least partially factored in to guidance by Origin management. Eraring output jumps Historic generation of current owned or controlled assets. increasing the likelihood that Origin's Energy Markets EBITDA comes in at or above the top end of company guidance for $1.000 Wind 3.000 Solar 2. Spot electricity prices averaged $115/MWh during the quarter versus the variable fuel cost of Eraring which we estimate is approximately $50/MWh assuming spot or short-term coal purchases at adjusted export parity.000 7. we suspect helped by a buildup of the coal stockpile following an extended outage in 2Q17.000 Brown Coal 0 Total pcp 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Source: NEMsight ® Origin Energy (ORG. ignores changes in ownership/control. This would suggest upside versus pcp and our modelled estimates of $50mn or more.500mn. Figure 4: ORG generation output by fuel type (GWh).000 Liquid Fuel 6. GWh 8.000 Gas 4.450- 1. 11 April 2017 the black coal-fired Eraring power station in NSW was approximately 1.AX / ORG AU) 5 .000 Hydro 5.0TWh higher than pcp. Net of estimated auxiliary losses.000 Black Coal 1.

The shaded area shows the one standard deviation range based on past 12 months volatility. It is often handy to know the price momentum especially when the stock is trading close to its highs and lows: Is the stock trading close to its peak? Is the momentum against the stock? *Consensus is IBES consensus supplied by Thomson Reuters. It illustrates variability of stock returns. Target return is calculated as capital gain plus forecast dividend yield (net) over the next 12 months. and where the share price is relative to consensus mean and consensus range target. once you make a number of brave assumptions. 11 April 2017 Reference Appendix Our new “Total return forecast in perspective” chart helps visualize Credit Suisse and consensus views of a company’s 12-month return within the context of forecasting risks and its historical trading pattern: 12mth Volatility is calculated as the annualised standard deviation of weekly total return series over the past 12 months. risk. The way to think about it is that one would rather take 10% forecast return from a stock that has 20% volatility. there is a 68% probability that the share price will end up inside that range in 12 months’ time.AX / ORG AU) 6 . in other words. grossed up for franking. This aids visualisation of a number of important factors such as: the range of analyst estimates. Target Price. 52wk Hi-Lo is maximum and minimum daily closing price over the past 52 weeks. For the consensus mean and range. Sales. IBES is a survey of sell side research analysts. *Mean is the average of target returns. DPS. For "CS tgt" we have used Credit Suisse’s target price and Credit Suisse forecast for 12-month forward dividend. collecting a few dozen data points such as EPS. where Credit Suisse’s estimates on this stock sit relative to consensus. ROE and so on. while the shaded area around the mean represents the range of estimates from the lowest to the highest estimate. In statistical terms. Origin Energy (ORG. than from the stock that has 40% volatility. we have used consensus target price and consensus dividend forecasts for 12 month forward.

82 5.73 N 22-Oct-14 12.00 19. a portion of which are generated by Credit Suisse's investment banking activities As of December 10. The analyst(s) responsible for preparing this research report received Compensation that is based upon various factors including Credit Suisse's total revenues.11 4.55 15.95 25 19-Aug-14 14.Jan. Origin Energy (ORG.36 * 13 21-Aug-14 12.60 25.93 12.00 09-Feb-17 24.40 06-Dec-16 6.00 O * Asterisk signifies initiation or assumption of coverage.AX / ORG AU) 7 .29 10.70 19.87 N O U T PERFO RM 11-Sep-15 6. is or will be directly or indirectly related to the specific recommendations or views expressed in this report.40 U 31-Jan-17 7.90 28-Sep-16 18.50 13-Apr-16 4.AX.30 10 07-Sep-15 16.09 6.80 3 19-Feb-15 11. A$27.70 18.00 30-Sep-15 5.34 6.50 31-Jan-17 22.AX Closing Price Target Price Target Price Closing Price ORG.Jan.00 * Asterisk signifies initiation or assumption of coverage.75 N EU T RA L U N D ERPERFO RM 20-Aug-15 7.36 04-Aug-15 9.40 N N EU T RA L O U T PERFO RM 27-Jul-16 20.60 O 20 11-Feb-15 15.Jan.02 18.AX Date (A$) (A$) Rating 30 25-Jun-14 14.90 N 13-Oct-16 5.68 18. TP A$7.40 01.62 01.90 15 01-Jun-15 16.58 5.AX.90 O 24-Nov-16 20. OUTPERFORM.30 12.2015 01.Jan.62 22.00 26.73 N 18-Aug-14 12.63 8.30 13-Mar-17 6. 3-Year Price and Rating History for AGL Energy (AGL.07 14.Jan.80 10-Feb-16 19. 3-Year Price and Rating History for Origin Energy (ORG.71 15.46.08 16.AX Closing Price Target Price Target Price Closing Price AGL.2017 19-Jan-16 17.Jan.2016 01.18 18.81 U 8 02-Dec-14 10.70 * 22-Oct-14 13.67 9.10 13-Aug-15 16.14 N* 17-Jul-14 14.52 7.50 O 27-Jul-16 5.50 02-Feb-15 9.2015 01.36 7.AX) AGL.97) Origin Energy (ORG.15 9.29 14.2017 02-Jul-15 10.41 7.2016 01.56 5. with respect to the companies or securities that the individual analyzes.65 9.AX Date (A$) (A$) Rating 18 15-Aug-14 12.56 13. 11 April 2017 Companies Mentioned (Price as of 11-Apr-2017) AGL Energy (AGL. 2012 Analysts’ stock rating are defined as follows: Outperform (O) : The stock’s total return is expected to outperform the relevant benchmark* over the next 12 months.36 11.0) Disclosure Appendix Analyst Certification Mark Samter and Peter Wilson each certify.AX) ORG.12 05-Nov-14 12.10 19-Feb-16 4.81 5. that (1) the views expressed in this report accurately reflect his or her personal views about all of the subject companies and securities and (2) no part of his or her compensation was.15 19. A$7.

31%.00 target price is a decrease in oil prices given the leverage which exists within the APLNG JV. A Neutral may be assigned where the ETR is between -5% and 15%. ETR ranges for Outperform and Underperform ratings did not overlap with Neutral thresholds between 15% and 7. Underperform where an ETR less than or equal to 5%. based on developments with the subject company. *Relevant benchmark by region: As of 10th December 2012. clear. Underweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is cautious over the next 12 .AX) Method: Our ORG discounted cash flow (DCF)-based sum-of-the-parts yields a $7. and Sell. Neutrals the less attractive. the client’s risk profile and investment.) An investor's decision to buy or sell a security should be based on investment objectives.5%. Any statement herein regarding any US federal tax is not intended or written to be used. target gearing of 32. Credit Suisse's distribution of stock ratings (and banking clients) is: Global Ratings Distribution Rating Versus universe (%) Of which banking clients (%) Outperform/Buy* 45% (64% banking clients) Neutral/Hold* 39% (61% banking clients) Underperform/Sell* 14% (54% banking clients) Restricted 2% *For purposes of the NYSE and FINRA ratings distribution disclosure requirements. our stock ratings of Outperform.S. Restricted (R) : In certain circumstances. the expected total return (ETR) calculation includes 12-month rolling dividend yield.3% risk-free rate. with an equity beta of 0. and cannot be used.13/sh adjustment for the reversionary risk within APLNG. 6. 11 April 2017 Neutral (N) : The stock’s total return is expected to be in line with the relevant benchmark* over the next 12 months. For more detail please refer to Credit Suisse's Policies for Managing Conflicts of Interest in connection with Investment Research: https://www. ratings are based on a stock’s total return relative to the average total return of the relevant country or regional benchmark. The services provided by Credit Suisse’s analysts to clients may depend on a specific client’s preferences regarding the frequency and manner of receiving communications.5%. We set our target price at $7. Risk: The key risk to our OUTPERFORM rating and 12-month $7. and Underperform most closely correspond to Buy. Credit Suisse policy and/or applicable law and regulations preclude certain types of communications. Market Weight : The analyst’s expectation for the sector’s fundamentals and/or valuation is neutral over the next 12 months.S.15/sh valuation which includes a negative $0. Hold. the meanings are not the same. An analyst may cover multiple sectors. Neutrals the less attractive. please contact your sales representative or go to https://plus.95. Credit Suisse’s policy is to update research reports as it deems appropriate. and Underperforms the least attractive investment opportunities. including an investment recommendation.0% equity risk premium and 5. As of 2nd October suisse. and Canadian as well as European ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector. and Underperforms the least attractive investment opportunities. Our DCF employs a weighted average cost of capital (WACC) of 9.5%. Other risks Origin Energy (ORG. Credit Suisse's policy is only to publish investment research that is impartial. For Latin American and non-Japan Asia stocks.00/sh in-line with our DCF valuation. For Australian and New Zealand stocks. as our stock ratings are determined on a relative basis. given that Origin now trades below our valuation. To access all of Credit Suisse’s research that you are entitled to receive in the most timely manner. during the course of Credit Suisse's engagement in an investment banking transaction and in certain other circumstances. prior to 2nd October 2012 U. and other individual factors. and Canadian ratings were based on (1) a stock’s absolute total return potential to its current share price and (2) the relative attractiveness of a stock’s total return potential within an analyst’s coverage universe. Target Price and Rating Valuation Methodology and Risks: (12 months) for Origin Energy (ORG.AX / ORG AU) 8 . (Please refer to definitions above.html . Prior to 18 May 2015. the sector or the market that may have a material impact on the research views or opinions stated herein. The overlapping rating range allows analysts to assign a rating that puts ETR in the context of associated risks. Credit Suisse does not provide any tax advice. Plus. *An analyst’s coverage sector consists of all companies covered by the analyst within the relevant sector. Important Global Disclosures Credit Suisse’s research reports are made available to clients through our proprietary research portal on CS PLUS. Not Rated (NR) : Credit Suisse Equity Research does not have an investment rating or view on the stock or any other securities related to the company at this time. by any taxpayer for the purposes of avoiding any penalties. current holdings. the size and scope of the overall client relationship with the Firm. independent. which was in operation from 7 July 2011. Further risks include disappointing on expected reductions in operating costs and unit capex at APLNG. We rate the stock OUTPERFORM. as well as legal and regulatory constraints. Origin's Energy Markets segment is set to benefit from improving market fundamentals including higher wholesale electricity prices and increased volatility. Neutral. Not Covered (NC) : Credit Suisse Equity Research does not provide ongoing coverage of the company or offer an investment rating or investment view on the equity security of the company or related products. U. Japanese ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector. Analysts’ sector weightings are distinct from analysts’ stock ratings and are based on the analyst’s expectations for the fundamentals and/or valuation of the sector* relative to the group’s historic fundamentals and/or valuation: Overweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is favorable over the next 12 months. Underperform (U) : The stock’s total return is expected to underperform the relevant benchmark* over the next 12 months. with Outperforms representing the most attractive. fair and not misleading. Volatility Indicator [V] : A stock is defined as volatile if the stock price has moved up or down by 20% or more in a month in at least 8 of the past 24 months or the analyst expects significant volatility going forward. respectively. with Outperforms representing the most attractive. Certain research products are only made available through CS PLUS. An Outperform rating is assigned where an ETR is greater than or equal to 7. Credit Suisse research products may also be made available through third-party vendors or alternate electronic means as a convenience.

com/disclosures/view/selectArchive for the definitions of abbreviations typically used in the target price method and risk sections............ Important Regional Disclosures Singapore recipients should contact Credit Suisse AG.. See the Companies Mentioned section for full company names The subject company (ORG.... please visit https://www..Mark Samter .. including site visits... This research report is authored by: Credit Suisse Equities (Australia) Limited. within the past 12 months Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company (ORG. analyst and is made available in the U. Credit Suisse does not accept or permit analysts to accept payment or reimbursement for travel expenses associated with these events.AX) within the next 3 months.. Individuals receiving this report from a Canadian investment dealer that is not affiliated with Credit Suisse should be advised that this report may not contain regulatory disclosures the non-affiliated Canadian investment dealer would be required to make if this were its own report.... Peter Wilson Important disclosures regarding companies or other issuers that are the subject of this report are available on Credit Suisse’s disclosure website at https://rave...... Risks associated with Origin's exploration and production activities include pricing risk on resources.... or was during the 12-month period preceding the date of distribution of this report. Origin Energy (ORG... Singapore Branch for any matters arising from this research report. research analysts listed below may not be associated persons of CSSU and therefore may not be subject to the FINRA 2241 and NYSE Rule 472 restrictions on communications with a subject company..Mark Samter ........S. Principal is not guaranteed in the case of equities because equity prices are suisse. Inc... Credit Suisse provided investment banking services to the subject company (ORG.....AX) within the past 12 RVS--Restricted Voting Shares... AGL.....S. volume risk relating to the amount of fuel produced.html..... a client of Credit Suisse.... SVS--Subordinate Voting Shares...... Please refer to the firm's disclosure website at https://rave. research analysts listed below (if any) are not registered/qualified as research analysts with FINRA..........AX / ORG AU) 9 .....AX...... Credit Suisse has a material conflict of interest with the subject company (AGL.. increasing costs. A$1.. public appearances and trading securities held by a research analyst account. Peter Wilson has approx...AX) currently is........ and mild weather which could reduce demand for electricity and gas. They won’t become unrestricted for 3 years........ Commission is the commission rate or the amount agreed with a customer when setting up an account or at any time after that........ unsuccessful exploration expenses and capex risk........ A member of the Credit Suisse Group is party to an agreement with.. disseminated within the past 12 months..........S.. the subject issuer (ORG.... Peter Wilson To the extent this is a report authored in whole or in part by a non-U. 11 April 2017 include volatile wholesale electricity costs... For Credit Suisse Securities (Canada).AX) ...... or may have provided services set out in sections A and B of Annex I of Directive 2014/65/EU of the European Parliament and Council ("MiFID Services") to......'s policies and procedures regarding the dissemination of equity research........000 worth of AGL shares as part of an employee share purchase or by calling +1 (877) 291-2683.AX) within the past 12 months...... analyst contributors: The non-U..... dissemination and history of recommendation for the subject company(ies) featured in this . the following are important disclosures regarding any non-U..S........ Credit Suisse Equities (Australia) Limited............. Restrictions on certain Canadian securities are indicated by the following abbreviations: NVS--Non-Voting shares... please refer to the link: https://rave. For date and time of production... The non-U. Credit Suisse has received investment banking related compensation from the subject company ( suisse. increased customer churn in competitive retail markets.... The analyst(s) involved in the preparation of this report may participate in events hosted by the subject company......

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