White Energy Company Limited White Energy Company Limited (ASX : WEC) (ASX : WEC) Other OTC: WECFY (ADR) Company Profile January 2008
Forward Looking Statements Except for the historical information contained herein, the matters discussed in this presentation contain forward-looking statements, including statements, containing the words “planned”, “expects”, “believes”, “strategy”, “opportunity”, “anticipates”, and similar words. Such forward-looking statements are subject to known and unknown risks, uncertainties, or other factors that may cause the company’s actual results to be materially different from historical results or any results expressed or implied by such forward-looking statements. We assume no obligation to update any forward-looking statements to reflect events or circumstances arising after the date hereof. In addition where comparisons are made between White Energy Company and other companies, we have made best efforts to properly interpret publicly made information by these companies but cannot be certain that such comparisons are completely accurate.
White Energy’s Coal Upgrading White Energy’s BCB process upgrades low value coals by reducing the moisture and compacting into dense, physically and chemically stable lumps that can be handled, transported and utilised like normal coal.
Company Snapshot Listed: Australian Securities Exchange (ASX: WEC) Other OTC: ADR Program (WECFY). Business Description: Commercialization of Coal Upgrading Technology. Shares outstanding: 123,632,586 fully paid ordinary shares. – Options Outstanding 32,415,097 Recent share price 31 December 2007 – ASX: A$3.00 (US$2.64) – Other OTC: US$13.40 Equity market capitalisation*: A$486M (US$428M). Available funds: A$46.7M (US$41M) plus US$35million through a converting note facility from BHP Billiton Corporate headquarters: Sydney, Australia; offices in Indonesia and China. Full-time personnel: 30. Public since: March 2005. Insider ownership: 34% of shares outstanding. * Total fully diluted shares on issue if all options are exercised. Assumes all notes are not converted, Exchange Rate A$1.00 =US$0.88 Notes:
Financial Snapshot Consolidated Balance Sheet (A$000’s) 31 Dec 30 June 30 June 2007* 2007 2006 Current Assets 48,974 18,411 6,700 Non Current Assets 76,561 67,482 59,126 Total Assets 125,535 85,892 65,826 Total Liabilities 5,956 8,423 4,411 Net Assets 119,579 77,469 61,415 Total Equity 119,579 77,469 61,415 Consolidated Statement of Cash Flows * Forecast (A$000’s) YTD 31 FY2007 FY2006 Dec 2007* Net Cash (outflows) from Operating Activities (1,977) (1,301) (769) Net Cash (outflows) from Investing Activities (12,150) (12,700) (1,518) Net Cash (outflows) from Financing Activities 45,529 22,509 5,902 Net Increase (decrease) in cash & equivalents 31,402 8,508 3,615 Closing Cash & Cash Equivalents 46,474 15,072 6,564
Global Market Drivers • Rapidly growing coal demand - Global coal demand is expected to grow significantly through 2030, particularly from the fast growing economies of China and India (IEA). • New crude oil paradigm placing upward pressure on competitive fuels - Rising crude oil pricing is increasing demand for cheaper, indigenous fossil fuels. • Deliverability of high quality coals is declining - In both North America and Asia, production of high thermal value / low emission coal is declining. • Increasing global emphasis on emissions reductions - Across the globe, emissions of CO 2 , SOx, NOx and Hg are coming under increased regulation. Coal is a vital resource option for meeting the world’s sustainable energy needs.
Issues Facing the Coal Industry Coal is the lowest cost and most easily accessed energy source in the world, however there are several issues that reduces its attractiveness as an energy source into the future. • Combustion of coal releases CO 2 and inefficient use could have global climatic impact. • Many traditionally utilized coals are major sources of pollutants such as SO 2 and NO x . • The world has very large reserves of coal which is low in pollutants such as sulphur and ash but are not exploited because of their low energy, impacting CO 2 emissions and transportation economics. • In some regions such as the USA dust from coal transportation and handling has become a major environmental, economic and logistical problem.
WEC - A Facilitator to Zero Emissions White’s Upgraded Efficiency Improvements Advanced Technologies + + + Zero Emissions Coal Existing Power Plants New Power Plants Coal upgraded by the White Conventional sub-critical plants can Integrated gasification Carbon capture and storage can reduce Coal technology can be used to achieve thermal efficiencies of up to combined cycle and emissions of C0 2 to near zero. Advanced supply each of the stages of the 40%. Improving less efficient plants pressurized fluidized bed technologies gasify coal by heating it to coal technology lifecycle offering will reduce CO 2 emissions by up to combustion plants operating in temperatures so high that it breaks down immediate CO 2 emission 22%. Improved efficiency sub-critical the USA, Japan, and Europe into a variety of petroleum products. CO 2 reductions of up to 10%. plants operate throughout the world. achieve very high efficiencies is separated out and then sequestered by Supercritical and ultra supercritical and low CO 2 emissions. directing it into underground reservoirs plants can achieve efficiencies of up Integrated gasification fuel where it will remain buried forever. When to 45% and operate in Japan, USA, cells, under development, can combined with advanced technologies, Europe, Russia, China, and achieve even higher carbon capture and storage will facilitate Australia. efficiencies. the hydrogen fuel economy. Source: Adapted from World Coal Institute (2003)
Research and Technology Enhancements White Energy’s strategy is to: Act as an enabling technology partner today: • Coal upgraded by White Coal Technology can be used to supply each of the stages of the coal technology lifecycle offering significant environmental benefits. • WEC will continue to improve our existing process and invest in developing our technology with a particular emphasis on applications to coking coal Invest in coal technologies for the future: • As the global market for coal and related end products grows, White Energy will continue to develop and acquire synergistic technologies in both coal upgrading technology and emissions reductions. • Developing a unique suite of coal upgrading and emissions reductions technologies will enable White Energy to partner with a growing number of players in the coal value chain and enable it to be a key player in a zero emissions world.
Coal Dust – A Major Problem in the USA Transportation of coal presents significant logistical, environmental and financial challenges for all stakeholders in the coal value chain. Coal transported by rail from the Powder River Basin (PRB) to power utilities results in dust accumulating on the track along the joint line. Problems associated with increasing levels of dust include: – Coal accumulation results in track surface and maintenance issues. – Reduction in train velocity on the high density PRB route. – Coal dust releases foul track ballast and requires higher ballast maintenance. – Takes capacity away from loadings.
Coal Dust – A Major Problem in the USA Increasing Coal Shipments: Rail With the rapidly increasing number of Co Ave. PRB Coal Trains Per Day shipments, accumulation rates have visibly accelerated over the past few years. While no other product is allowed to spill or leach from railcars, coal has historically been overlooked. However, due to increasing economic and Jan-03 Mar-03 May-03 Jul-03 Sep-03 Nov-03 Jan-04 Mar-04 May-04 Jul-04 Sep-04 Nov-04 Jan-05 Mar-05 May-05 Jul-05 Sep-05 Nov-05 Jan-06 Mar-06 May-06 Jul-06 Sep-06 Nov-06 Jan-07 Mar-07 May-07 Jul-07 environmental pressures, a much greater focus is being directed to solving this PRB Lost Loading Opportunities problem. (YTD 4 Sept 2007) White Energy’s briquetting process 1100 substantially reduces the levels of dust. This 1000 is considered a significant competitive 900 800 advantage over competing technologies 700 600 because it increases railway efficiency by 500 970 400 reducing maintenance costs and increasing 300 200 loading opportunities. 275 100 90 0 Mine Railroad Utility
The White Energy Technology Benefits Higher energy content: WEC increases heat the useable energy content by between 30% and 200%, creating valuable power generation efficiencies. High volume production capacity Low upgrading costs: Favorable conversion economics allow the product to compete with bituminous coals. Lower spontaneous combustion risk: Upgraded coal is physically and chemically stable, and can be handled, stored and transported as normal coal. Lower transportation costs: Process reduces moisture, resulting in up to 30% decrease in load volumes and concomitant transportation costs. Reduced greenhouse gas and pollutant emissions: More efficient burning results in lower CO 2 , SO 2 , NOx and Hg emissions. Reduced levels of dust: Significantly reduces the quantity of dust when compared with unprocessed sub-bituminous coal.
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