AJ Lucas Group Limited

Right Place, Right Time

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AJ Lucas Group

y Specialist engineering, infrastructure services providery Developer of energy assets; particularly coal seam methane

and shale gas assetsy Developer of water solutions and water projects

Water & Wastewater

Energy Resources FoodFoodFor

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Key Metrics

y Sector focus:• Energy

• Water & Wastewater

• Coal

• Public Infrastructure

y Balanced business focusing on:• Maintainability and quality of earnings stream

• High margins and profits

• High degree of technical input and expertise

y Working with principals – corporate / private, government, semi-governmentF

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Strategy

y Market leadership in chosen sectorsy Niche businessesy Differentiate through innovationy Integrated business – shared overhead platformy Leverage off intellectual capital:

• To provide integrated service and “capture” clients• Generate entrepreneurial opportunities

y High barriers to entry• Very high degree of technical, engineering knowledge and

practical experience• Specialised equipment, some cases very technical

y Environment / safety / community (HSEC) focus

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Activities

y Drilling• Underground• Exploration• Production• Trenchless technology• Geotechnical• Well services• Engineering services

y Construction & Infrastructure• Pipelines• Compressor stations• Construction and civil• Major projects

y Operations & Maintenance• Facilities management• Marais-Lucas Technologies• Asset managementF

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Drilling Services

y Focus on energy – coal seam gas and coal. No minerals exposure

y Acknowledged industry leader

y Balanced portfolio of drilling and oil & gas services

y Full service, integrated business model

14.7%

7.5

50.9

2005/2006

22.3%

15.1

67.6

2006/2007

103.388.4yRevenue ($m)

22.018.1yEBITDA ($m)

21.3%20.5%yEBITDA margin

1st Half2009

2007/2008

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Drilling Division: Growth

y Largest fleet of drilling rigs on Australia’s eastern seaboard – 88 in all

y Very strong growth –both organically and by acquisition• July 2006: McDermott Drilling

• July 2007: Capricorn Weston

• August 2008: Mitchell Drilling 0

200

400

600

800

1000

Jun-06

Jun-0

7

Jun-0

8

Dec-08

No.

of E

mpl

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Drilling Employee Growth

010203040506070

Jun-06

Jun-07

Jun-08

Dec-08

No.

of R

igs

Exploration Production UISHDD Well Services

Rig Growth

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Drilling Services

y Strong geographical presence – operations throughout NSW and QLD

y Very strong client base –only the majors

y Strong technical focus –emphasis on engineering, innovation and productivity

y Business model allows cross-fertilisation of skill sets and resources

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Drilling Client Base

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Construction & Infrastructure

y Focus on pipelines, specialist civil engineering and construction

y Emphasis on oil and gas, water and wastewater and public infrastructure

y Public sector priority driving demand together with private sector requirements

y Strong focus on engineering, technical or industry knowledge and experience skill sets

4.8%

5.8

120.3

2005/2006

5.1%

7.6

148.7

2006/2007

189.4335.9yRevenue ($m)

9.123.3yEBITDA ($m)

4.8%6.9%yEBITDA margin

1st Half2009

2007/2008

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Recent / Current Projects

PROJECT NAME VALUE CLIENT

Western Corridor Water Recycled Project – Eastern Pipeline

$550m Qld Government Alliance

Bonaparte Gas Pipeline – 296kms 16” pipeline from Wadeye to Baan Baan Springs

$96m EPC for APA Group

Perth Desalination Plant No.2 – Phase 1. Design, Construct, Maintain

$650m EPC for Water Corporation WA Alliance

Ivy Entertainment Complex, Sydney $72m Construction for Merivale Group

Brooklyn to Lara gas pipeline. Victoria – 55kms 12” pipeline

$45m Construction for APA Group

Goro Nickel Mine Tailings Pipeline, New Caledonia. 36kms 32” HDPE water pipeline.

$50m Vale Alliance

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Operations & Maintenance Services

y Knowledge and understanding of the assets generated from other divisions, complementary activity

y Strong existing client base:• Moomba to Sydney pipeline sleeving – 10 years

• Sydney Opera House – 11 years

y Stable recurring income streamy Activity being ramped up. Government infrastructure

spending initiativesy Marais-Lucas Technologies – new trenchless

technology in telco, water and gas reticulation – cross country and urban

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Quality Clients

yWoodside

y Chevron

y Goro Nickely Origin

y Telstray Rio Tintoy Brisbane Watery BP Australia

yWater Corporation, WA

y QGCy Donaldsony Regional water authorities

y Jemena

y Aldiy Originy XstratayWater Corporation, WAy Sinopec/CPP

yMerivale Groupy Eastern Star Gas

y Centennialy Victoria Water Companies

y Shell

y Sydney Aquariumy Santosy BHPy Hunter Water Corporation

y Epic Energy

y Sydney City Council

y AGLy Angloy Sydney Watery Santos

y Hyundaiy Arrow Energyy BMA-BHP BillitonMitsubishi Alliance

y Queensland Governmenty APA Group

Civil ConstructionCSGCoalWater & WastewaterOil & Gas

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Financial Performance

y Strong revenue growthMitchell Drilling 4 months contributionBonaparte pipeline completed

y MarginsDrilling margin increase because of change in business mixConstruction and infrastructure margin adversely affected by difficult working conditions and timing of settlement of claims

y Order book $245.7m24.5¢

$13.5m

-

6.1%

$26.0m

$44.5m

$424.3m

2007/2008

242.5¢Earnings per share

$160.3mNet profit after tax

$218.4mProfit on Sale of Investment

6.3%Underlying EBIT Margin

$18.5mUnderlying EBIT

$29.9mUnderlying EBITDA

$292.8mRevenue

1st Half2009

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Balance Sheet

y $42m debt repaid since balance date. Bank debt now $72m

y Cash now at $215m

y Asset finance of $35m backed by 3-5 year contracts with major corporates

y Preference shares of $45m held by GSJBW Fund for 5 years

y Deferred consideration of $21m due to vendors 09/10 and 10/11

y Working capital strong in second half – impacted by timing of projects

y Investments carried at cost, not market

$150.5m$61.7mBank borrowings & finance

N/A2.4xNet debt/EBITDA

0%45.5%Gearing

$21.0m$9.3mDeferred purchase consideration

$45.0m-Preference shares

$234.0m$16.6mCash

$269.6m$65.2mNet Assets

$368.1m$164.7mTotal liabilities

$637.7m$229.9mTotal assets

Dec 08Jun 08

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Key Business Objectives

y People• Continue to improve safety performance• Significant investment in training & development

y Markets• Focused on continuing leadership in our niche market

segments• Ongoing development of O&M business strategy• Pursue regional infrastructure opportunities• Leverage our experience to partner in further major project

opportunities

y Systems• Significant investment in ICT systems• Significant enhancement to our risk management procedures &

controls

y Financial• Maintainable revenue streams• Improve bottom line results through increased efficiencies

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Three Year Objective

ROC: 125%

Employees: 300

Blended Margin: 14%

Leveraged use of skills acquired in other divisions plus market opportunities

y Facilities management

yOperations & maintenance

yMarais-Lucas Technologies

yOther services

Operations &Maintenance /Services

ROC: 120%

Employees: 350

Blended Margin: 8%

Specialist engineering and construction services allowing cross-fertilisation of skills to all Lucas key sectors

yPipelines

yConstruction

yProject Management

yEngineering

yCivil infrastructure

Construction&Infrastructure

ROC: 31%

Employees: 1,000

Blended Margin: 23%

Balanced portfolio focused on coal mining and coal seam gas production

yUnderground

yExploration

yProduction

yHDD

yWorkovers

yWell services

Drilling

Target financial metrics

Business raison d’etreNature of activity

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Energy Assets

y Two investments realised in December 2008 and January 2009 for $293.5m

y Gloucester Basin: Total MPO and AJL investment –$28.5m approx - sale price $370m

y Two more investments to be realised in 2010y Additional assets being created, mainly offshorey World class technical teamy Looking at other opportunities,

including geothermal and geosequestration

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Water Assets

y Business Plan refined and team assembled

y Projects identified, technologies obtained / identified

y Legislative regime changing, opportunities emerging for private sector to be involved in water ownership

y Water is an increasingly valuable asset – in a market which is evolving – integrated water and wastewater solutions

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New Water & Wastewater Solutions

Growing demand for water solutionsGrowing demand for water solutions

• Membrane technologies• Alternative biological treatments• New processes• Research & development

Municipal wastewaterSewer mining

Treatment technologies

Recycled waterStormwater / Grey / Black

Coal seam gas water

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Outlooky Business model is sustainable

• Client base

• Overhead structure

• Engineering / technical basis

• Market sectors (particularly CSG, oil & gas, water & wastewater)

y Continued growth in core sectors notwithstanding economic climate

y Government spending on infrastructure and upgrade of facilities as economic cycle turns through

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Outlooky Platform and corporate architecture being established

for next phase of business growth and development y Strong balance sheet (to be strengthened with further

asset sales) to take advantage of opportunitiesy Emphasis on management, training and personnel

development y Future is bright. Looking three years “down the

track”. Well positioned.

“Right Place, Right Time”

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This presentation has been compiled by AJ Lucas Group Limited from sources it believes to be reliable. However it is not warranted as to its completeness or

accuracy.This presentation is not an offer to sell or a solicitation to buy any securities.

As it is prepared for general circulation, all readers must use their own judgement and seek their own advice before relying on anything in this presentation.

© 2009 AJ Lucas Group Limited

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