Ann: Preliminary Final Report, page-4

Hi Doc

I also understood the power station to be a BOO scheme. Otherwise, how would the extensions be handled and why invest in them, while of course the original Energy Epic and Mercelo announcements stated the scheme was a BOO scheme. However other posters here were adament that it was a BOOT scheme following a presentation by GE at the AGM in 2016. EWC refused to clarify, so I complained to the ASX as the difference between BOO and BOOT is in my view material. BOOT also explains why the depreciation and amortisation schedules, as well as the pension liabilities are NIL by 2022. Sure enough - EWC clarified the power station is a BOOT scheme, whereby PLN has the option to buy the plant on some undisclosed formula in 2022. The usual formula is a peppercorn transfer, and given the plant would be carried at NIL at that time, it seems that this secret formula is no different. This is why SE mooting to the Indo VP a 50/50 deal on the power station post 2022 seemed to me to be a good, albeit optimistic, deal for EWC.

However if the PSC has been extended, meaning that all the value of the station can be stripped out via gas pricing, and if EWC can deliver the gas to the Wajo LNG terminal instead, then PLN has been outmaneuvered by EWC and PLN no longer has an incentive to take over the power station - even if it is the current profit centre in Indo. Perhaps the 50/50 deal is real. Perhaps the PPA will be on better terms.

So the current announcement, to me at least, is very good news indeed.