Origin Energy Limited

Okay, good morning, everyone. It's Frank Calabria here, and welcome to the Origin half-year results presentation. I'm joined here today by the executive leadership team of Origin, and the format this morning will be consistent with prior reporting periods. You'll hear from both me and Laurie Tremayne, and then very happy to open up to questions for the team and myself. Just turning to the presentation, therefore, going to slide four, and so our key messages for this half-year result. Firstly, consistent with the release that we sent out this morning, just to let you know that the consortium has substantially completed due diligence and active engagement continues in relation to the submission of a binding proposal, and we will continue to keep shareholders updated, and it's contained in the release, what we sent out today. Origin is well-placed to capture value from the energy transition, and so in this presentation, we've given information as to how We think a bit about that and it sits across three aspects. It's through a combination of an advantage portfolio. We are positioned for growth through a number of businesses and further, we represent a platform for transition investment and we set out some of that on the following slide. We continue to execute our strategy and we have a clear ambition and strategy that we're executing at pace. You would have noticed that we two weeks ago upgraded our guidance for energy markets for the financial year 23. And our medium term earnings recovery is on track and we'll go through that today. And even since the upgrading of that guidance, we've continued to see a strengthening and an improvement in operating and trading conditions, including performance here and with Octopus. And we now expect to be at the high end range of our guidance. No doubt you'll be reflecting on that because when you think about the first half results and the second half, it is clearly a tale of two halves and reflects, I think, the events we saw at the end of the last financial year playing through in the first quarter and what we've seen since then is a continuing momentum and recovery that we'll talk through. APLNG continues to generate strong cash flow, which is evident in the presentation. And we will make some comments today about policy Just really the key message from us is that it must support investments if we're to successfully deliver a sustainable transition over time in Australia. I did mention on slide five, I did mention that origins were placed to capture value through the transition. When we talk about an advantage portfolio, it really centres across the fact that we have a large scale and capable retail business. We have a competitive gas supply business. And we also have the largest thermal peaking fleet, all of which are key facets that you would want to have in your portfolio as we go through a transition that requires renewables and storage to be entered into the portfolio as coal exits the market. And not the least of which also is that we have a high quality, low cost APL&G gas resource. And you can see the benefits of the diversification across the two businesses in the half year results again. By position for growth, I really talk about the opportunities we see across businesses, firstly in terms of Octopus, and we'll talk about its ascendancy in the retail market in the UK, but also its global utility software business through multi-product offerings, Broadband EV and Origin Loop, our virtual power plant, and through our growth businesses in Xero and Community Energy Services. We've distinguished those growth businesses from the platform for transition investment, Because the combination of that retail scale, firming generation, gas supply and the upcoming Arara enclosure provides a large scale opportunity, which I think has been identified by the consortium that have approached us as an opportunity to invest in renewables and storage and also distributed energy assets, I should add, to accelerate the transition. And then as we consider further opportunities that exist in the transition, there's also the carbon products through carbon markets as they evolve. and then hydrogen developments. Turning to the financial highlights, you can see that the statutory profits up $530 million to $399 million through favourable derivative valuation and impairments in prior periods not occurring this year. But you can see the underlying profit is down and it really is the reflection of a mixed result in terms of the energy markets earnings being down. We've got strong results still continuing to occur in APL&G But what we have this year is the tax on those distributions, which has flowed through to the underlying profit result. And you can see that's down to $44 million. Underlying EBITDA overall is just slightly below last year, the equivalent period, equivalent half last year, at $1.05 billion. And you can see the combination of the two businesses reflected in the underlying return on capital employed. You've got integrated gases return on capital employed, and we should say for this, obviously, over this period of time at 19.8%, I'm sure you'll all reflect that that's been a cyclical business over time, depending on commodity cycles. But it's experiencing strength through the commodity markets at the moment. But you'll also notice that the energy markets return on capital point is negative. And so when we're talking about the recovery, the growth in earnings that we're seeing, partly what we're talking about here is a recovery in the energy markets earnings back to run rates that we've seen previously. Our adjusted net debt is up by 0.4 billion to 3.3 billion, and Laurie will take you through the cash flow. And I'm pleased to say that the board has declared a fully franked interim dividend of 16.5 cents per share. We have a clear ambition and strategy on slide seven. The ambition is to lead the energy transition through cleaner energy and customer solutions, and we have three strategic pillars that we remain very focused on. Unrivaled customer solutions, accelerating renewables and cleaner energy, and also critically important is delivering reliable energy through the transition. I've just included that slide to remind you of that framework because as we turn to the next slide, we're really just highlighting some of the key achievements to date on executing our strategy. And what you can see there is in terms of some of the key achievements, we now have 96% of our customers on the Kraken platform. We were pushing hard to get 100%, but we're 96% through and we'll complete that over the coming half. Octopus is now the number two UK energy retailer following the successful acquisition of Bulb. which is quite an achievement for a business that was only established in the middle of last decade. The CES gross profit is up to $70 million on the back of organic growth, and in particular this half, the acquisition of Wynn. And Origin Zero continues to actually offer low-carbon and other non-commodity solutions to large business customers, and we're gaining good momentum. We're very well advanced on the Araring battery. We're in... quite advanced negotiations with the selected contractors underway as we approach the FID decision, which will be very soon, we expect. We've got virtual power plant connections that have grown by 75% in the last six months on our way to two gigs. We now have 450 megawatts and that's continued to grow. And I have to say we've made good progress in relation to the Hunter Valley hydrogen opportunity, a domestic hydrogen, not green, a hydrogen opportunity. over the course of the last six months. In terms of APLNG, it's been another very strong half-year cash distribution at $783 million. Compared to the last time we held one of these coals, I'm pleased to say that both coal delivery and stockpiles have recovered at Araring, and we now have over a million tonnes on the stockpile. And we've experienced wet weather in APLNG, which has impacted production, and we'll talk through the recovery of that underway And in relation to our upstream exploration and appraisal business, the Beetle is sale is completed and we have just very recently signed the canning sale agreements. So we've achieved quite a bit today. We haven't achieved everything we set out to, but very pleased that we continue to execute our strategy at pace. Now I'm sure For all the analysts out there, they've got rulers out. And the whole idea was not to have rulers out on this, but really to provide an earnings-targeted trajectory over time, but really to demonstrate the various parts of Origin so you can see how we think about this business over the coming years and both the sources of that growth and the value drivers. In particular, you'll see it's done by FY24, so it doesn't show the FY23 results. But what you can see there is a recovery as Araring makes a positive contribution on the back of a tariff reset over a period of time. And what really will occur over time as Araring comes out of the fleet is that the wholesale electricity returns will be dominated until we introduce more growth in renewables and storage by the returns we will see in the capacity market through our thermal peaking generation also through our legacy renewable assets and also through our ability in the market to continue to capture value in what will increasingly have intraday spreads and volatility. What you will then see over time is that that will be supplemented by a growth in renewables and storage as we introduce the new wave of assets to the portfolio. In this case, clearly reflecting the fact that we would partner with others in terms of the capital that was introduced. And we would continue to see that as a growth engine. And that's what we really, one of the key areas we described as that platform for investment through the transition. We have stable and long-term earnings from our strategic gas position, which is really a combination of legacy coal contracts and as well as capabilities, transport and a portfolio and an ability to manage that. And we also have a scale, low cost retail business, which will continue to deliver a stable margin before we think of the additional products it's added to and the benefits you'll see that will accrue as a result of the implementation of Kraken, which flow from next year. And then you'll see the two areas of growth, which are really the growth businesses we described earlier, but that is really presented to us by the customer scale that we have in the business and the capabilities. And that really extends across our community energy services, virtual power plant and broadband. And then the growth that will emerge and is emerging from Octopus as a retailer in the UK and as a customer licensed growth business or a software business that's scaling up across the globe. And in addition to that, they're increasingly investing in the transition as their market goes through a similar trend as we go through there. So we really wanted to provide that to demonstrate, I think, to you how we see the earnings contributors and that trajectory that's targeted based on our strategy execution and the near-term recovery in earnings, particularly in the wholesale electricity markets. We continue to be a purpose-led organization. It's a slide you would see us. We're serious about it. We need to get energy right for our customers, communities, planet, and our people. And you can see there are a number of the achievements that are sitting across that over the last six months. I would only highlight a couple of those points. For customers, we continue to support our power on hardship customers and important right now in terms of rising prices. The communities in which we operate, it's the growing role and contribution played by regional indigenous suppliers. The great work of the Origin Foundation in education and the community investment and engagement in Arari that stand out over the last period of time. We were very pleased in the terms of Planet to have received 94.5% shareholder support to our climate transition action plan and you can see there across a range of the products and initiatives that we continue to make progress. So we have strong targets, we've got action and we've got progress. And for our people, we've seen improvement in safety performance, but we never rest, as you would expect, organisations wherever there are people that are still continuing to experience injuries and incidents, and so we will continue to focus on that. We've increased the proportion of our female senior leaders, and we're actively supporting our people at Araring through the transition. Finally, before I pass over to Laurie, I think it's important to note that we must have policies that support investment. And we made comments six months ago, and I think there are some clear messages that need to be, I think, made if we're to actually succeed on accelerating the transition. There is substantial investment required to underpin the new energy system, and I don't think that's any mystery. That's right across generation, transmission, it's renewables, but also gas supply. And investors will require stable policy and adequate returns reflecting the risk profile to have that investment made. There is investment in new gas supply required urgently and government and regulatory interventions that create uncertainty don't act in that investment being made on a timely basis and therefore that's very important. It's good progress to see the capacity mechanism that was introduced and I think it was very pleasing to see that progress There is further work required because that capacity mechanism did not include either the orderly transition of coal and also the investment in new gas-fired generation. And alongside storage and other assets will be required for a successful transition, particularly as we know the scale of what's required is significant and time is of the essence. And lastly, should never forget the fact that we are supporting bill relief for customers that are most in need. We are well aware that prices are rising for our customers and will continue to play our part. And that remains a key aspect alongside the regulatory and policy arrangements that continue to be worked across the industry. So on that note, I'm going to pass over to Laurie and then we'll return to talk more deeply about some of the operational performance.

Thanks, Frank, and good morning, everyone. I'm going to start with profit bridge on slide 13. So underlying profit was down $224 million to $44 million, due mainly to lower electricity gross profit and income tax on unfranked APLNG dividends, partially offset by stronger prices lifting APLNG earnings. Earnings from the non-APLNG part of our upstream business is $70 million lower due to higher oil hedge losses partially offset by a stronger commercial position in our LNG trading business and lower exploration and appraisal spending following our decision to exit our non-APLNG acreage. DNA expense is higher with the expected reduction in operating life at Araring. Moving to slide 14. The extremely high commodity prices at the end of the last financial year had significant impacts on our full year results, which have partially unwound in this half year. I'll talk more about this later, but higher fuel and pool costs further squeeze margin in our electricity business. The $2.9 billion of net in the money derivatives held on the balance sheet last year end have revalued lower and partially settled resulting in a large net asset reduction on the balance sheet and fair value movements in statutory earnings and hedge reserves. Very high pool prices in June 22 resulted in a large net creditor position with AEMO. This arises as we are short generation and therefore a net buyer from the pool. This net creditor was repaid in the first half, resulting in a large working capital movement and lower operating cash flow, which I'll quantify later. In addition, our coal stockpile was rebuilt at high market prices following a period of poor operating and delivery performance from a key supplier. Octopus energy earnings have also been impacted in the half by high and volatile wholesale prices and regulatory intervention. I'll cover this in more detail later. So the cash flow on slide 15 dimensions some of these outcomes. lower cash earnings and $757 million of higher working capital. For the reasons I've just explained, higher tax paid, partially offset by a further inflow of future exchange collateral, have resulted in a net operating cash outflow of $786 million. Higher distributions from APLNG and lower investment spend and net interest contributed to free cash flow. With higher expected cash earnings, more stable working capital and ongoing strong distributions from APLNG, we anticipate an improved free cash flow result in the second half. I'll drill into energy markets cash conversion in more detail on the next slide, 16. This chart shows energy markets EBITDA, that's the black line plotted against cash flows. The operating cash flow in red approximates EBITDA in all periods except for the last two. This is a function of the high commodity prices particularly at June 22. The chart shows how the low operating cash in the first half of 23 unwinds the strong cash conversion in the second half of last year. Last year's result also benefited from high futures exchange collateral inflows shown here in yellow. In blue you can see the $65 per certificate shortfall charge we've paid for the under delivery of LGCs. We'll make a further shortfall payment of approximately 200 million in the second half, but then expect refunds net of the cost of Ford certificate purchases of around 420 million across financial years 2024 to 2026. In the second half, we expect to see a rebound in energy markets earnings and positive operating cash flows. that rebound in cash flow should see us get back to more like our long trend in cash conversion. Turning next to APLNG on slide 18. Now we all know LNG is a cyclical business and we invest expecting to earn better than our cost and capital across these cycles. Without full participation across the cycle, Investment in these capital-intensive, long-dated projects would not be economic. As many on the call would recognise, there have been years where this business hasn't returned our cost of capital. We're currently at a strong point in the cycle, benefiting from higher global oil and LNG prices. We're also benefiting from good field performance, enabling us to defer development expenditure. These benefits combined to deliver origin a half year distribution of 783 million and a return on capital employed of over 19%. The cash generation performance of APLNG in the half was outstanding. On a 100% basis, $3.9 billion of cash was generated from operations after paying Queensland royalties of almost 400 million. Investment spend was only 200 million and debt servicing just over $500 million, allowing total distributions of an impressive $2.8 billion for the half. On slide 19, based on an expected improvement in earnings and cash generation, and given our debt remains towards the lower end of our debt to EBITDA range, currently at 2.1 times, the board has declared an interim dividend of 16.5 cents per share, consistent with last year's final dividend. This dividend, as Frank said, will be fully franked and the DRP will remain suspended. We're not in a position to contemplate further capital management initiatives just now, but this remains a consideration for the board. Turning next to energy markets earnings on slide 19. Energy markets EBITDA was 120 million lower in the half compared to the first half last year. Electricity gross profit was 183 million lower. Octopus earnings, 71 million lower. And these were partially offset by 145 million recovery in gas gross profit. The electricity result represents a $10.80 per megawatt hour reduction in unit margins down to $2.10 per megawatt hour. This reduction is largely a function of the very high fuel and pool purchase prices not being fully reflected in customer tariffs. Unit fuel costs reduced earnings by $341 million and unit pool costs by $193 million. We expect these higher costs will be recovered with future tariff resets, allowing a rebound in electricity margins. In gas, customer tariffs for both mass market and CNI customers have repriced to recover higher unit costs, benefiting earnings by 199 million. Offsetting this, increased gas procurement costs in this period decreased earnings by 102 million. Business customer wins have driven a net increase in sales volume of 12.2 petajoules, providing a 32 million positive earnings impact. Octopus earnings were substantially lower in the half particularly in the October to December period. Our equity account at EBITDA result for the half was a loss of 83 million. Now, there were two factors driving this underperformance. Firstly, a long energy position caused by lower demand, partly due to unseasonably warm October weather, resulted in Octopus selling back excess volumes during a period of materially lower wholesale prices. Secondly, The introduction of the energy price guarantee by the UK government resulted in fixed tariff octopus customers renewing onto a lower cap price set well below the hedged cost. In January to March this year, the price cap is now set and captures the significantly higher wholesale hedging costs observed in the latter part of calendar year 2022. As a result, octopus are forecasting a recovery in earnings in the second half this financial year, and we've already seen positive earnings results from Octopus in January. Lastly, turning to integrated gas on slide 20. Excluding the impact of the equity sell-down, our share of APLNG earnings were up $397 million, primarily due to the higher LNG prices, both oil-linked contract pricing and spots. The realized effective oil price before hedging was US $109 per barrel compared to 68 in the prior year. Operating costs were $157 million higher with higher royalties associated with higher prices representing most of this increase. High purchase of gas, increased work over activity and the commencement of planned cyclical upstream maintenance activities have also contributed. And with all that, I'll hand you back to Frank for our operational performance.

Okay, thanks very much, Laurie. Now we'll turn to the operational review and kicking off with energy markets on slide 23. Given the events that have occurred in the electricity market over the last 18 months and the electricity margin that's been suppressed through that period of time, we've included on that slide really what's occurred in the market for the financial years 22 and the half year 23, and what's then flowing through to our improved outlook. So you can see that in the electricity markets in FY22, the low wholesale electricity prices during COVID, they flowed through to customer tariffs, and that when combined with the coal supply disruption and the extreme market events and conditions in the fourth quarter of that year led to high wholesale prices and therefore compressed margins. As we moved into the first half of financial year 23, the half we've just gone through, the customer tariffs did increase, but still not enough to recover the higher costs incurred. And since then, obviously, cold deliveries have improved as we've gone through the half, and that's where we can see that market conditions have eased. But really, that half year result is still reflecting those higher costs. And so as we look forward to the second half of this financial year and beyond in the 24, we do see the continued recovery in electricity earnings. Wholesale electricity prices have moved lower, including through the impact more recently of the temporary price cap. And then customer tariffs will increase again as the lagged recovery of those higher costs incurred continues to flow through into the next financial year. I should say that the implementation and the impact of the recent coal price cap is still being worked through, and there are a number of arrangements that we and other industry participants are actively in dialogue with the New South Wales government right now. What flows on the next slide is really just an analytical representation of some of the comments I've just made there. Firstly, on the left-hand side chart, you will see the... the short-run marginal cost of ARARing compared to what is recovered through customer tariffs, the default market offer or the default market offer. So that's what's most recently resulted in the negative margins. And when tariffs reset on the 1st of July, we expect this to move to a positive contribution and for that to strengthen over time. The middle chart shows the trend of electricity forward prices in the swaps. and the average of which feeds into those customer tariffs. And so that's the relevance of including that. And you can see the rising forward price from, it started in April, but more likely May that will feed in from May through to December that will flow through to those tariffs. It also highlights the drop that's more recently occurred as a result of the caps coming in. And the chart on the right really highlights the improved delivery of coal and also the coal stockpile increase over the period. Just turning to gas, the overarching message is there's a strong gas outlook. Based on the fact that we've largely locked in the cost of supplies we go in over the next couple of years, and tariffs are repricing to reflect those costs that have been locked in. And when you look at the left-hand side chart, it really does highlight the sales volumes to business customers we've grown share in that market as we've won them over the course of the period. Origin is almost entirely contracted to business customers for their FY23 prior to the introduction of the $12 a gigajoule cap and so therefore it's not having a material impact in this financial year and you can see therefore the on the middle chart just how contracted volumes have evolved since 30 June through to the end of December. We continue to offer contracts to our business customers, either fixed price or spot-based. We did that through the period. A fraction of our CNI gas volume is on default pricing as it traditionally has been. We've ensured that customers during the recent renewal window have been offered alternatives to this It's only those that have not responded to that that might be sitting on default. But otherwise, we have worked very hard to bring everyone on to either fixed price contracts or those that follow the underlying spot market. Our supply is made up, on the right-hand chart, is made up of a mix of fixed price, price review and JKM and oil-linked contracts. The JKM exposure is fully hedged through to FY23 and FY24. and substantially or very primarily largely hedged in FY25 as well so we've got into that period and as you many of you all know we've got a price review on beach supply contract that occurs on the 1st of July 23 so it plays out for the 24 year and that process is underway at the moment I'll now turn to retail and you can see the retail market environment that really Firstly, as it relates to churn, you can see that spike that occurred around the times of those wholesale market events and also the communication of the tariffs at the time led to a lot of people seeking new offers. What's happened then is that the market has remained elevated over a period of time of that six months. And in the case of Origin, except for that really, that one event around the July period has largely churned, remained flat for the balance of the six months. and overall our churn in the market is about 13.2%. What you can see on the next chart is really, we talk about the value management that we've undertaken through personalization and segmentation that has delivered a good benefit in this first half. You should think about that as a combination of lower discounts that are emerging, plus our ability to continue to use data and analytics to then segment and focus on the customer value and the propositions we make to them, and also moving customers off non-profitable products through the period. You can see that that discount is really a reflection of those market conditions as well, as the wholesale prices are high. It's no surprise that across the market, retailers therefore reduce those discounts. And just to highlight the extent of those market events that you see, we've had seven retailer of last resort events since May this year. That seems to have calmed down more recently, but that's occurred. And then, so in addition to continuing to create value, we've also had customer accounts grow as our multi-product strategy continues to be executed and we continue to evolve our offerings and the products and we continue to grow that and pleasing to see the 4.7 star rating on Trustpilot. In terms of those growth businesses earlier, you can see then on slide 27, the growth in community energy services. We will get a full year earnings contribution from WinConnect this year and combined with the underlying organic growth, you can see that businesses continue to grow. We're number one in the market and can see good profile for contracts that are going to evolve over time that flow through to results. In the case of broadband, we continue to grow our customers up to 74,000. and pleasingly received the CanStar Blue Award. That growth really, we really are seeing the product resonate in the market. I think the key thing for us has really been balancing how much of our focus goes onto that product while we've been moving through the implementation of all of the RetailX program. So it's really around settling that business down and we feel very positive towards what we can achieve over time. As I said earlier, very pleased to see the growth in the megawatts that are in our virtual power plant. And we've added, I think, just under about 190 megawatts and 90 or so of those megawatts have come through our origin zero business. So we can see that cross both consumer and business segments. RetailX did talk about, just on slide 28, talked about it. We're now 96% customers accounts on that 3.4 million. We're in the toughest time of these projects. We've got the last cohorts coming in now. We're stabilizing operations. We've been pleased with the way the program has been undertaken. You can see that through the customer happiness index and employee happiness index that we are gaining confidence in the operating model, but we're in that time where we're stabilizing, settling down, and as you can imagine, trying to wind down the balance of the business and achieve that well as we land the plane of the new RetailX being built. We remain on track for our targeted savings in FY24 against the 2018 baseline of $200 million to $250 million cash cost savings. We will see some higher cost to serve this year, but that will be then followed quickly by the savings that we set out in the FY24. In terms of Octopus, Laurie did talk about this earlier, but just highlights what's happened in the UK market as it entered into this period. They've got the same circumstance that as higher wholesale costs are incurred they've got a lag where they recover it in the UK though that's now moved to a quarterly basis but really what that yellow line highlights is just where wholesale costs did go in the commencement of the last quarter uh and that's now being recovered through the tariffs in the January to in the January tariffs in the market so we are seeing strong recovery in the octopus earnings even in January and uh The other key aspect that they continue to manage is that it was very unseasonally warm in October, which meant that they sold some length of their position back into a lower spot price market. But we've got the bold acquisition coming in in the second half. We've got the recovery through those tariffs and it all looks like that recovery is well and truly on track based on January. It continues to be a very impressive growth story for Octopus and now following Bold. You can see they're the second largest energy retailer by customer accounts. They continue to lead the market on both customer experience and cost to serve and are well-placed to be able to grow their margin as the UK, really, the customer growth strategy is now completed. So they've now got themselves in a market position where they can be really running that business for cash. The growing licensed business, 25 million customers now contracted on to the Kraken platform, a very strong growth pipeline. It's now expanding into utilities such as water and broadband and clearly the migration. You can see where that is relative to the contracted customer base. And they have in their version of the VPP now got 4.6 gigawatts of assets contracted. Are they largely with third parties? They've got a 1.2 gigawatts online. And you should think about intelligent octopuses, the equivalent activity that we're doing with our origin loop in that it's really on our own customer base. And in their case, they're a much bigger market for electric vehicles. And as a result, it's nearly all through that asset category that they've got their 140 megawatts. Ours is spread across really a variety of devices that are in the home or in businesses where there's a large energy load. So they're seeing some very big increases occur in that business as well. And then now they've established themselves as one of the largest specialist EV leasing businesses in the UK. Just turning to integrated gas, the story really is that those record high commodity prices have really led to record high revenue. You can see there that in the half we delivered three spot cargoes, but overwhelmingly the revenue is being driven by the higher oil prices on our export contracts. And we were able to achieve very high production as a result of the downstream nameplate capacity on the LNG. Although, as you know, when it comes to the production, we'll talk about some of the weather impacts that are recovering underway. I think it's important to note that on the next slide that APLNG is a major supplier, has always been to the East Coast domestic market. Since the project's sanctioned, over 1,400 petajoules have been sold to the domestic markets. They've been supplied at average prices that are well below those paid by international customers. And you can see even in the last 12 months, we've paid $800 million in royalties to the Queensland government. And so it continues to play a key role, has always played a key role in the domestic market. The production, which was in our quarterly, won't be a surprise, is the guidance is down because productions and in the half year, it's down 5% against the equivalent half. There's been an unplanned non-operated outage that we obviously received volume from, but probably the key driver has been the cumulative impact of wet weather that occurred really in the early months and that therefore has led to the lag in really sort of upswing in volumes as we've got restricted access and a whole range of activity was stalled over that period of time. We also have up-planned the cyclical maintenance on our gas processing facilities. That goes to, it does have some impact on production and costs. And when you look at our costs, it's really the cyclical activity and now the increased work over activity as we prioritize those that are flowing through. And we've also experienced higher power costs in the business as well. In terms of that production recovery underway, we just wanted to really show to you the impact of waiting on weather, which is really that percentage of time a work over rig has stood down for wet weather on average. And so you can see that that impact over the last couple of years really associated with El Niño has actually had quite an impact on us. We are seeing that improve. We've had drier weather recently that's reduced in November and December. And the recovery is also being driven by the number of online wells. The work over activity really ramped up over the last several months. And we've also got new infrastructure coming online in terms of the Talinga-Kondabrai North Pipeline and soon to have the Orana South Loop Pipeline in the second half. It all adds to our operational flexibility and ability to deliver volumes. What we provided on slide 36 is just a little more detail about where some of that focus is on operational improvements. And in terms of that production optimisation, it really shows just how we target lower well pressures that then flows through to our gas rates and improving those and other things like optimising pump speeds. I think the point there is that there's a continuous program of activity that goes to the improvement of production and that's something that we're very much focused on. And we've also highlighted alongside that the mean time to failure and what we really have, I think, just demonstrated through that chart is the successful strategy in relation to swell packers that have improved well reliability and as they move through more of our stock of wells over time, you'll see an improvement in that alongside other initiatives. And that network infrastructure on the right-hand side is really just a little more detail on what I just described about some of the initiatives that are underway right now. I did touch on the beginning in slide 37, just on the strategic view of the non-APLNG assets. We've completed the sale of Beedaloo. We've executed the agreement in relation to Canning, which is expected to complete in the second half. And you can see in relation to the Cooper Aramanga, five permits will be transferred back to Bridgeport and the remaining 12 permits remain under review and we'll advance that over the coming period. So then just looking at outlook, really we provided updated guidance a couple of weeks ago in January. What has happened since then is the operating and trading performance in energy markets, including octopus, has continued to improve. and therefore the energy market's underlying earnings is now expected to be towards the higher end of that upgraded guidance range that we provided and therefore continues to reinforce the earnings recovery in that business and all of the initiatives underway. Otherwise, the guidance is the same as it was there. I think the only thing that we've added a comment here which supports some of the comments Laurie's made earlier, but the cash flow in the second half, as you would expect, is expected to improve, and it will be on the back of those higher earnings. There will be one thing that offsets against that, which is the old GC shortfall, which is really the renewable certificate shortfall charge, which has been a successful strategy, but clearly has a cash flow impact that gets recovered over time. and there's no material impact expected in relation to the $12 gigajoule cap, and we continue to work through the coal, so none of this guidance includes anything associated with the legislated coal price cap that is being completed. We do anticipate that that earnings growth continues into the next year, not the least of which is that you'll have customer tariffs rising to recover those higher costs, octopus energy growth, and also you'll have those cost savings coming through retail, and we'd expect to continue to see the benefits of a variety of drivers flowing through to 24. The guidance for integrated gas is just the same as what we provided two weeks ago in relation to the production of 660 to 680 petajoules, and really, as a result of that, it's associated with those volumes. The capex and opex range is the same. It flows through to a higher unit Right really on the back of the production. That's the key difference there and Why what we've done in terms of LNG trading guidance as you can see? We've seen the benefits and we did communicate those to you a couple of weeks ago as well So very pleased with the performance of that portfolio So on that note we will we've concluded the presentation and very happy to then open up to questions and And the team here and me are ready for any questions you may have. So thanks very much for listening.