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Envestra Limited

Ian LittleChief Financial Officer

July 2002

New Zealand Investor Presentations

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Australia’s largest natural gas distributor

currently offers

a 10% yield

60% income tax free

“I would expect now to see long-term stock market returnsin the neighbourhood of 7%”

Warren Buffett – July 2001

Envestra

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1. Who is Envestra?

2. What are stapled securities and what are the benefits?

3. Why Envestra will suit NZ Investors?

Envestra

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Our business Transport of gas Deliver gas on behalf of retailers

Own two types of pipelines Distribution - 17,600 km; retail consumers Transmission - 1,100 km; from fields to cities

Consumers 900,000 retail consumers Supply 30% of Australian domestic market

Our focus Infrastructure sector Energy only Distribution and transmission assets –

consistent with low risk investor base

Envestra Limited

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Our strengthsinclude:

Natural business monopoly Government regulations established

Geographically and operationally diverse Vic, SA (Head Office), Qld, NSW, NT

Strong cashflows – reliable revenues

Strong financial position Medium and long term financing Active in capital markets

Diversified investor base 18,000 plus investors

Strong Management & Board

Competitive Advantages

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The advantagesinclude

Predictable revenues 90% domestic Not reliant on large volume consumers

Negligible asset stranding risk No duplication of pipelines

Guaranteed organic growth 2020 – natural gas to be 24% market share

Capex Discretionary and spread evenly

Low pressure networks – low risk

Alternative sources of supply

Our Focus - The Distribution Sector

“Stable” distribution sector delivers consistent results

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23% increase in the past 4 years Distributions reliably forecast –

short/medium term No decrease anticipated

High yield: 10+% return No capital gains tax for NZ

investors

Envestra’s Distributions

0

50

100

150

'98 '99 '00 '01

$M Cents

Operating profit before financing and income tax

Distributions

37.9

137.3

7.75

9.50

7

8

9

10

'98 '99 '00 '01 '02

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Energy Industry Structure

Generation(production)

Distribution

Gas

NSW Vic SA Qld WA NT

Retailing

Electricity

Envestra’s operations

Transmission

50+ Entities

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Consolidation Will occur Envestra - well placed to participate

Merger & Acquisition opportunities Vertical & cross industry integration

Exit of US entities Continues to encourage lower RAB/ prices

Government sales In short-term limited opportunities

Industry Commentary

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What are stapledsecurities …

A share with an attached loan note Commonly used in Australia for infrastructure

financing i.e. United Energy, MacquarieInfrastructure

Allows early return of cash to shareholders beforeprofits are generated

Tax efficient for issuers and shareholders - 60%income tax free

How does itwork?

Payments called Distributions as payment comes fromcashflows

Distribution has two parts Loan note interest Loan note repayment

Loan note is progressively reduced

When loan repaid, payments become dividends 2009

Loan notes have qualities of ‘Equity’ – reported as ‘Debt’

Stapled Securities

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Make-up of EnvestraStapled securities

1997 IPO A$1.00 issue price made-up of: 30¢ share 70¢ loan note

2002 90¢ (NZ$1.08) security made-up of:Loan note

Balance June 2002: 43¢/ security = NZ52¢Share

Value: 47¢/ security = NZ56¢

Distributions make-up 2001/ 02 Loan note interest 3.5¢ NZ4.2¢ Loan note Repayment 6.0¢ NZ7.2¢

9.5¢ NZ11.4¢

Since 1997Repayments of loan note: 27¢ = NZ32.4¢Distributions paid 43.65¢ = NZ53.28¢

Envestra Limited

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$M NZ$M

EBIT + 4% 88 106

Revenue + 4% 152 182

Profit before Tax and Loan NoteInterest + 20% 23 28

PAT v 3.9 loss 6.1 7.3

Gas delivered + 8%(19% over 1999)

Summary of First Half Performance

*Envestra’s stapled securities pay interest to shareholders which is included ‘above the PAT line’

Six months ended 31 December 2001

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Investing in Envestra

Why Envestra willsuit NZ Investors …

Reliable high yield distributions Proven track record – tax effective for

NZ investors

Industry structure & position Prospects for change

Portfolio & sector diversification Comparative yield

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Australian gas utility sector larger, gas usage more widespread,many gas fields

Sector provides greater growth opportunities

Comparison to New Zealand Utilities

Metric

UnitedNetworks

2002EPowerco2002A

ContactEnergy2002E

NGC2002E Average

EnvestraLimited2002E,

90¢PE 8.4 13.0 21.2 8.1 12.7Gearing 55.3% 50.1% 27.7% 55.0% 47.0% 74%Yield 4.7% 6.8% 4.6% 4.4% 5.1% 10.6%EV/ EBITDA 7.9 9.5 9.9 5.7 8.3 13Interest cover 2.2 2.1 3.9 2.3 2.6 1.4RAB 1.82 1.77 n/a n/a 1.80 1.35

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Why invest in Envestra?

If as an investoryou want …

Attractive cash yield – 10% plus A tax efficient investment Capital gains tax advantage Favourable exchange risk

Envestradelivers ….

Predictability of revenue Monopoly positions 90% from domestic and small I&C market Regulatory and operational diversity

Successful growth over past four years 120% increase in revenue

Demand for natural gas Growth 2-3% p.a.

Long life assets Pipeline lifespan - 100 years

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AppendicesWhere We Operate

Our Shareholders

Value of Consumers

Gas Industry

Energy Distribution & Transmission Companies

Envestra Gearing

Regulatory Environment

Victorian Regulatory Re-set

Financial Summary

Yield Comparison

Comparative Financials

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Where we operate

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Share RegisterStructure …

18,700 shareholders 8,500 IPO shareholders still hold stock Top 20 shareholders hold 55% of stock

Major shareholders Origin Energy (19%) Cheung Kong Infrastructure Holdings

(Hong Kong) 19% - aka CKI Lowy Family (4%)

Security Purchase Plan (SPP) Similar to DRP – $3,000 limit 2002 SPP take-up 50%

Our Shareholders

Support from two major energy companies

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Consumers(900,000)

Gas delivered(108 PJ)

Revenue($270

million)

Value of domestic and small I&C consumers

99.99%

41 PJ67 PJ

90% 10%

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Gas Industry

Full contestablity to be introduced

Regulated monopolies ENVESTRA

Competitive

May be regulated; may competeDistributors

Transmission

Retailers

Consumers

Producers &Generators

ElectricityGas

Competitive

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Energy Distribution and Transmission Companies

Distribution TransmissionState/TerritoryGas Electricity Gas Electricity

South Australia Envestra ETSA Utilities (CKI) Epic EnergyEnvestra

ElectraNet (3)

Victoria EnvestraMultinet (1)TXU

AGL (Solaris)CitipowerPowercor (CKI)TXUUnited Energy

GasNet PowerNet

New South Wales AGLEnvestra (Albury)Integral EnergyGreat Southern Energy

Energy AustraliaIntegral EnergyCountry EnergyAustralian Inland Energy

Australian Pipeline TrustDuke EnergyGasNet

Transgrid

Queensland Allgas (Energex)Envestra

EnergexErgon Energy

Allgas (Energex)EnvestraDuke EnergyEpic EnergyAustralian Pipeline Trust

Powerlink

Western Australia AlintaGas (2) Western Power Epic EnergyOrigin EnergyAustralian Pipeline TrustCMS Gas

Western Power

Northern Territory Envestra Power and Water Authority EnvestraSantosNT Gas (AGL)

Power andWater Authority

(1) Utilicorp (51%)/AMP (49%) – managed by United Energy(2) WA Gas Holdings (45%), (22.5% United Energy/22.5% Utilicorp), public (55%)(3) Harold Street Holdings – Powerlink (Qld) (40%), YTL Power Investments (33%), ABB Net SA (20%), Others (17%)

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Envestra Gearing

Envestra’s gearing is appropriate for a regulated gas distributor

Gearing Loan Notes not included in gearing as repaymentsrequire ‘available cash’ (earnings)

Gearing currently 75%

Gearing for comparable utilities APT: 55% but Transmission Sector GasNet: 69%

Recent Ernst & Young independent valuation Potential increment: $203-292m

93¢ - $1.05/ security Gearing: 65%

Interest rate changes have minimal impact Currently 100% hedged, aligned to regulatory regimes

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Regulatory Environment

Envestra’s position Regulatory environment under NationalAccess Code

Queensland to December 2006 South Australia to June 2007 Victoria to December 2002

Tariffs based on ‘Cost of Service’ Operating Costs Depreciation on regulated assets ROI

Revenue set for 5 years

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Weighted AverageCost of Capital

Submitted Real Post Tax 7.9% Multinet (United) & TXU 7-7.8%

Based on:Risk Free Rate 6.1%Equity Beta 1.16Market Risk Premium 7.3%Debt Margin 1.65%RAB 1/ 1/ 03 $683mRevenue $131m p.a.

Envestra/Other Distributors

Opex Similar

Capex Lower $174m vs $270m (5 yrs)

Victorian Regulatory Re-set

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Financial Summary

*Envestra’s stapled securities pay interest to shareholders which is included ‘above the PAT line’

A$M NZ$M(1.2:1)

Annual Revenue 268 322

Profit before Tax and Loan Note Interest* 15 18

PAT excluding Loan Note Interest small profit small profit

Total Assets 2,400 2,880

Market Capitalisation - 705m securities 620 744

S&P Credit Rating: Investment grade BBB

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Yield Comparison

Company PriceJune 02

$

Distribution(cps)LY

Yield%LY

Envestra 0.85 9.5 11.1

Australian Gas Light 9.74 52.0 5.3Australian InfrastructureFund

1.40 5.5 3.9

Alinta Gas 4.16 16.5 4.0

Australian Pipeline Trust 2.42 13.5 5.6

United Energy 2.15 17.25 8.0

Source: AFR

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Comparative Financials - Listed Pipeline Companies

Stock ENV GASNET APAS&P/ ASX200Property Index

Year FYO1(A) FYO2(F) CY01(F) CY02(F) FY01(A) FY02(F) FY01(A) FY02(F)

Share Price 0.88 0.88 2.00 2.00 2.47 2.47Market Cap 536 620 260 260 603 603Net Debt 1,761 1,734 566 566 723 723EV 2,297 2,354 826 826 1,326 1,326DPS 9.25 9.50 22.00 22.0 21.00 21.00EBITDA 173 183 72 76 128 127EBIT 137 143 58 61 104 103Net Interest* 133 129 38 37 50 50

EV/ EBITDA 13.3 13 11.5 10.9 10.4 10.5EV/ EBIT 16.8 16.4 14.1 13.5 12.7 12.9Int Cover(EBITDA) 1.3 1.4 1.9 2.1 2.6 2.5Gearing 77% 74% 69% 69% 55% 55%

Gross Yield 11% 11% 11% 11% 9% 9% 7% 7%

*excludes Loan Note interest as ‘Distributions to Shareholders’exclusive of revaluation = 10% effect