Indonesian Geothermal EOI - Activated Logic - Indonesia Geothermal E… · INDONESIAN GEOTHERMAL March 2010 - Asia Pacific Edition TM. Indonesian Geothermal Exploration & Development

Indonesian Geothermal

Exploration & Development Opportunities 1Commercial in Confidence

Not to be Distributed

March 2010

Asia Pacific Edition

EXPRESSIONS OF INTERESTInvitation for


Exploration & DevelopmentOpportunities

INDONESIAN

GEOTHERMAL

March 2010 - Asia Pacific Edition

TM




March 2010


Disclaimer & Disclosures

This presentation has been prepared by Activated Logic Pty Limited (ABN: 62 134 740 293) trading as and hereafter referred to as “Activated Logic” for the sole purpose of introducing interested parties to the potential benefits which may be realised in the Indonesian geothermal sector. The information contained in this presentation is not investment or financial advice and is not intended to be used as the basis for making any investment decisions. The presentation has been prepared without taking into account the corporate objectives, financial situation or particular needs of any particular person, company, or organisation.

No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, or to the opinions and conclusions contained in this presentation. To the maximum extent permitted by law, Activated Logic, its partners, its directors, employees or agents, nor any other person accepts any liability, including, without limitation, any liability arising out of fault or negligence, for any loss arising from the use of the information contained in this presentation. In particular, no representation or warranty, express or implied is given as to the accuracy, completeness or correctness, likelihood of achievement or reasonableness of any forecasts, prospects or returns contained in this presentation nor is any obligation assumed to update such information. Such forecasts, prospects or returns are by their nature subject to significant uncertainties and contingencies.

The information in this presentation is an overview and does not contain all the information necessary for making any corporate, strategy, financial or any other decision. Before making any decisions, you should consider, with the assistance of your own legal, tax, business and/or financial advisers, whether a decision is appropriate in light of your particular investment needs, objectives and financial circumstances. Past performance is no guarantee of future performance. Unless otherwise stated, all “dollars” or “$” refer to Australian Dollars.

Technology development and commercialisation relies on the interpretation of complex and often uncertain data and information which cannot be relied upon to lead to a successful outcome in any particular case. Geothermal resources and technology development and commercialisation is inherently uncertain and involves potentially significant risk of failure. All information regarding prospective market sizes and other information, is given in the light of this caution.

This presentation contains a number of forward looking statements, therefore recipients of this presentation should conduct their own investigation, evaluation and analysis of the data and information described in this document. In particular any estimates or projections or opinions contained herein necessarily involve significant elements of subjective judgment, analysis and assumptions and you should satisfy yourself in relation to such matters.

The distribution of this document in various jurisdictions may be restricted by law. Any recipient of this must seek advice on and observe any such restrictions.

IMPORTANT DISCLOSURES

Activated Logic, or its directors, officers, staff and their associates may hold shares or other relevant interest in the securities of entities related directly or indirectly to any proposed or possible transaction as may be described or covered by this presentation. Activated Logic and its advisers may earn brokerage, fees, commissions, other benefits or advantages as a result of a transaction arising from any research, opinions, publications or solicitation of potential investors, partners or clients. Activated Logic may have provided corporate advice within the past and may continue to provide corporate advice to companies or related parties concerned, for which Activated Logic may have received gross fees and /or continue to receive fees.

Activated Logic holds investments directly and indirectly in a range of public and private entities and has relationships with a number of specialised brokers, international banks and other financial institutions, however Activated Logic is not itself a broker and is not authorised to directly deal in securities. Activated Logic operates within Australian Securities and Investment Commission Class Order CO/273 “Business introduction or matching services” which provides various exemptions from the obligations and requirements of Paragraphs 283GA(1)(a), 741(1)(a), 992B(1)(a) and 1020F(1)(a) of the Corporations Act 2001 (Cth).

The information contained in this presentation is for general information purposes only and does not constitute an offer to issue, or arrange to issue, securities or other financial products.

© Activated Logic Pty Limited 2010. All Rights Reserved.

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Indonesian Geothermal Expressions of Interest


Indonesian Geothermal Overview

The Indonesian Geothermal Advantage

Indonesian Geothermal Resources

Comparative Geothermal Development Costs

Activated Logic Contact Details

Global Geothermal Development Pipeline

The Indonesian Geothermal Opportunity

Additional Geothermal Project Locations

Geothermal Alliance Capability Statement

Your Strategic Geothermal Partner




March 2010



With a population of just over 240 million spread across more than 17,000 islands, Indonesia represents a substantial and growing energy market. The government has set ambitious targets for the installation of significant additional power generation capacity, consisting of both fossil fuel and renewable energy sources, particularly geothermal.

In addition to the 7 major currently operating geothermal projects in Indonesia, the increasingly supportive regulatory regime is encouraging the rapid construction of additional geothermal capacity. The geothermal development pipeline consists of projects at all stages of development.

Project Developer Year Online MW

Wayang Windhu II Pertamina 2009 117

Lahendong IV –VI Pertamina 2011 –2012 60

Dieng II Geo Dipa 2012 120

Panas Bumi ITOCHU 2012 330

Sumatra Jawa Pertamina 2012 240

Darajat IV Chevron 2014 110

Patuha Geo Dipa Energi 2014 180

Ulu Belu Pertamina TBD TBD

Project Developer Year Online MW

Darajat I –III Chevron 1994 255

Salak I –VI Chevron 1994 –1997 375

Dieng I Geo Dipa Energi 1998 60

Sibayak Pertamina 1998 2

Pengalengan Pertamina 2000 110

Lahendong I & II Pertamina 2001, 2007 40

Lahendong III PLN 2008 20

Kamojang PLN 2008 200

1

2

3

4

5

6

7

123

4

5

6

7

10

11

12

13

14

15

8

9

1011

12

13

14

15

8

9

Ope

ratin

g Pr

ojec

ts

Plan

ned

Proj

ects

Operating

Planned

Area of Geothermal Project Tenders

Source: Adapted by Activated Logic 2010, from proprietary and EER research.

Indonesian Geothermal Facts

Installed geothermal capacity

Geothermal target by 2025

Geothermal resources (conservative)

Geothermal resources (optimistic)

Geothermal development cost quartile

Geothermal resource quality

Distribution of Indonesian Geothermal Projects

1,286 MW

9,500 MW

10,000 MW

27,000 MW

quadrant 1 (lowest)

high temperature

The next wave of geothermal

development in Indonesia is being

led by ambitious Independent

Power Producers (IPP’s). These

project developers are keen to take

advantage of the recently increased

geothermal tariff and the attractive

CDM opportunities.

Given Indonesia arguably hosts the

highest quality, low cost geothermal

resources in the world, interest

and investment in the Indonesian

geothermal sector is expected to

intensify expeditiously.

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March 2010



High temperature geothermal resources

Large geothermal development pipeline

Capable development partners

Attractive project capex profiles

Substantial CDM opportunities

Competitive geothermal tariff

VAT concessions

Key Competitive Advantages

Sumbing Volcano. Java, Indonesia

World-class geothermal opportunities

As part of the Indonesian Governments “Crash Program” to install an additional 10,000 MW by 2011 and a similar capacity commencing in 2014, there is a sense of immediate urgency for increasing power generation capacity.

To accelerate the development of geothermal energy in Indonesia, the government has implemented a raft of measures including VAT-concessions for drilling equipment and subsidies. Of greatest significance, the government has legislated the state-run power utility Perusahaan Listrik Negara (PLN) to increase the geothermal tariff available to Independent power producers (IPP’s) from $US71 to US$97 per MW.

A 100MW Indonesian geothermal power plant project, has the potential to generate up to US$10 million per annum, from the sale of CER’s generated through CDM projects.

CER - Certified Emissions ReductionsCDM - Clean Development Mechanism (Kyoto Protocol)

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March 2010


0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Hyd

roth

erm

al M

W P

oten

tial

Hydrothermal Resource (Optimistic)

Hydrothermal Resource (Conservative)

Exhibit 2-7: Regional Hydrothermal Geothermal Resource Potential Comparison


Estimates by numerous institutions, including the U.S. Department of Energy (DOE), International Energy Agency (IEA), International Geothermal Association (IGA) and the Government of Indonesia have collectively determined the conventional geothermal potential of Indonesia to be approximately 27,000 MW.


Conventional Geothermal Resource Potential

Geothermal resource potential of 27,000 megawatts

Indonesia’s conventional (hydrothermal) geothermal resources are amongst the most significant in the world and are only behind the United States, which hosts vast geothermal resources (concentrated largely in the western states of California and Nevada). The increased geothermal activity in Indonesia is expected to further increase resource estimates.

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March 2010


$1,500,000$1,709,000

$1,873,000$2,000,000

$2,400,000 $2,444,519$2,610,000

$3,751,000

$4,018,000

$5,785,000

$5,274,321

$6,195,510

Sumatera (Coal) Wayang Windu II

Patuha Lahendon IV Ac�vated Logic Client A

Ac�vated Logic Client B

Indonesia Average

US (Lower-quar�le)

Tongonan (Philippines)

US (top-quar�le)

Australia (HSA) Australia (EGS)

Forecast Geothermal Development Costs (US$/MWe)


Indonesian geothermal resources are characterised by high temperature and shallow reservoirs with high flowrates, resulting in highly productive geothermal reservoirs. The high temperature Indonesian geothermal projects are often suitable for flash cycle (either single, dual or hybrid) based power generation systems which are exceptionally cost competitive,

largely due to the large turbine capacities often exceeding 50 megawatts. The power cycle cost efficiencies, high temperature resouces and the relatively low drilling costs for shallow wells, combine to make Indonesian geothermal development amongst the most competitive in the world to develop.

Source: Activated Logic 2010, from various proprietary and public domain data.

Actual & Forecast Geothermal Development Costs (US$/MWe)

Indonesian geothermal projects are highly cost competitive

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March 2010


0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Meg

awat

ts (M

W)

Operating

Announced Pipeline

Markets with existing geothermal capacity driving new global growth

Emerging Geothermal Markets


Installed geothermal capacity in Indonesia is forecast to increase rapidly from the current 1,286 megawatts to more than double, with current estimates at approximately 2,700 megawatts by 2012. Indonesia’s high quality geothermal resources, relatively low developments costs and



Indonesian geothermal pipeline exceeds 2,000 megawatts

the recently announced increased geothermal tariff are pivotal drivers behind major Indonesian geothermal development pipeline. The Indonesian geothermal development pipeline consists of both greenfields developments and expansion of existing geothermal projects.

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March 2010


01. Nanggroe Aceh Darussalam02. North Sumatera03. Riau04. Riau Archipelago05. West Sumatera06. Jambi07. Bengkulu08. South Sumatera09. Bangka Belitung10. Lampung11. Banten 12. Jakarta13. West Java#

14. Central Java15. Yogyakarta16. East Java17. Bali

18. West Nusatenggara 19. East Nusatenggara 20. West Kalimantan 21. Central Kalimantan 22. East Kalimantan 23. South Kalimantan24. North Sulawesi25. Gorontalo 26. West Sulawesi27. Central Sulawesi 28. South Sulawesi29. Southeast Sulawesi30. North Maluku31. Maluku32. West Papua33. East Papua # Including Banten province


Activated Logic represents numerous geothermal clients across the Asia Pacific, with a specific focus on Indonesia. Activated Logic’s Indonesian clients are active across the geothermal development value chain, ranging from projects at the early pre-survey stage, through to established, third-party verified resources on the verge of large scale, development drilling.

Our extensive and unique reach into the Indonesian geothermal sector, provides us with the unique capability to offer companies across the Asia Pacific with a diverse range of geothermal opportunities in Indonesia. Our Indonesian geothermal clients are looking for foreign partners for their respective geothermal projects which are interested in:

Jointly bidding for geothermal working areas (GWA’s) Conducting pre-feasibility studies for geothermal projects Conducting FEED, development drilling & power plant construction

Source: Adapted by Activated Logic 2010, from IJT 2009.


Activated Logic’s geothermal clients are actively exploring and developing geothermal projects in Indonesia targeting 3,000 MW’s of installed

capacity, representing more than 10% of Indonesia’s total geothermal potential.

All of these geothermal projects are seeking technical and financial partners to accelerate

the commercialisation of these exciting projects.

Available Geothermal Projects - By Province

Provinces in red indicate the current availability of geothermal project opportunities, by Activated Logic.

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March 2010


Australia Chile Europe (various) Iceland Japan Kenya Papua New Guinea Turkey United States

& other selected regions.

Regions with proven conventional geothermal resources.

Geothermal distribution


Conventional geothermal resources are typically found in regions proximal to continental plate margins. These areas are often characterised by historic or current volcanic activity.

In addition to the world-class geothermal resources found throughout Indonesia, the Global Geothermal Alliance has access to all the key prospective geothermal regions around the globe.

The members of the Global Geothermal Alliance conduct detailed research into they key geothermal markets on behalf of private clients, as well as more general industry and corporate research. A range of country specific geothermal reports are available by request.

Available project locations

We have developed an extensive network across the geothermal value chain over many years, and have a wealth of knowledge and experience to share .

Our experience spans the entire geothermal industry, encompassing the vast diversity of projects from early stage pre-feasibility, through to corporate finance for commercial scale development projects. We have a range of opportunities if you are looking at building or diversifying your geothermal portfolio internationally.

Conventional Geothermal Resources


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March 2010


globalgeothermal

alliance

TM

Your Geothermal Financial Partner

“If you are serious about developing a

competitive geothermal project portfolio;

- speak with us to find out, how the Global

Geothermal Alliance can activate and add

value to your geothermal assets.”

CAPABILITY STATEMENT

Discover the key value creation strategies utilised by the Global Geothermal Alliance (GGA), and explore the list of our recent geothermal transactions.

Request a copy of the Global Geothermal Alliance Capability Statement, by contacting Activated Logic, or available for download by clicking here .

Download Now

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http://www.activatedlogic.com/industry-focus-geothermal.html

http://www.globalgeothermalalliance.com/pressreleases/Geothermal%20Energy%20Commercialisation_low_res).pdf




March 2010


Research Services

• Benchmark exploration, drilling and plant costs• Geothermal sector & technology research• Market, grant and pricing research• Identification of suitable project & offtake partners• Identification of potential investors and/or lenders

Strategy Services

• Financing & power offtake strategies• Develop operational & corporate strategies• Determine optimal financial structure• Determine optimal ownership structure• Evaluation of acquisition opportunities

Communication Services

• Prospectus & IM development• Corporate partner negotiations• Promotional project collateral• Investor roadshows & dataroom• Annual reports & corporate literature

Investment Services

• Initial public offerings & sub-underwriting• Project assessment & valuations• Merger & acquisition evaluation• Investor roadshows & engagement• Identification of strategic investments

Financial Services

• Financing strategies & capital raisings• Debt syndication & bookbuild• Identification of financing options• Due-diligence & project valuation• Mergers, acquisitions & asset disposals

Base case scenario

ValueCreation

“Businessas usual”

PHASE 1 EarlyStageExploration

PHASE 2 Drilling &FeasibilityAssessment

PHASE 3 Design & ConstructionActivities

Value Added Services

Base Case Scenario

Research

Strategy

Communication

Investment

Finance

Business as Usual


Reservoir Volume

Reservoir Temperature

Reservoir Flow Rate Capacity

COMMERCIAL DRIVERS

High valueMarkets

Project Integration

TECHNICAL DRIVERS

Proximity to Infrastructure

Power CycleTechnology

Source: AL-GCAMTM, developed by Activated Logic, 2008 - 2010.

Activated Logic - Geothermal Commerciality Assessment MatrixTM

Activated Logic - Value Creation Process

Source: Activated Logic, 2008 - 2010.

Geothermal Service Offering

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March 2010


globalgeothermal

alliance

TM

Your Geothermal Financial Partner

Global Geothermal Alliance, Geothermal Financing Breakfast (AGEC, Nov 2009).

Global Geothermal Alliance, exhibiting at World Geothermal Congress (Bali), 25 - 30 April, 2010.

With a large proportion of the world’s conventional geothermal resources, geothermal experts from around the world will descend on Bali - Indonesia in April, for the 2010 World Geothermal Congress.

We look forward to seeing you in Bali.

Islandsbanki Sustainable Energy TeamKirkjusandi IS-155 Reykjavik, IcelandTel: +354 440 4500

For more information:[email protected]

Activated Logic Sustainable Energy TeamPO Box 889, Sanctuary Cover Queensland, 4209, AustraliaTel: +617 5561 7282

For more information:[email protected]

Australian Enquiries

1300 4 LOGIC or (1300 4 56442)

International Enquiries

+617 5561 7282

Direct

Mr. Bahay Ozcakmak

Mob: +61 (0)414 596 007

Email: [email protected]

Contact Details

For a confidential discussion to explore and discuss these geothermal opportunities, contact Activated Logic today.

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Indonesian Geothermal EOI - Activated Logic - Indonesia Geothermal E… · INDONESIAN GEOTHERMAL March 2010 - Asia Pacific Edition TM. Indonesian Geothermal Exploration & Development