The departure of Strike Energy’s long-standing chief executive Stuart Nicholls has been interpreted as the prelude to a likely sale of the company to joint venture partner Gina Rinehart.
MST Marquee analyst Saul Kavonic reckons Mrs Rinehart’s Hancock Prospecting is “amongst the most logical acquirers” of Strike after the latter’s decision to embark on a strategic review to “investigate ownership and funding alternatives”.
Hancock partners with Strike in the West Erregulla gas field, near Dongara, 350km north of Perth, in the onshore Perth Basin and underlined its ambitions in the region by buying Mineral Resources out of its energy interests in the area for $1 billion in December.
Mr Kavonic says Strike remains a “compelling” target for Hancock, which would be keen to optimise its growing position in the Perth Basin by acquiring Strike’s operating rights to West Erregulla and driving a development unhindered by a smaller partner’s funding restrictions.
Mr Nicholls and Strike agreed to part ways ahead of Thursday’s announcement of the board’s decision on the strategic review, with the company acknowledging his contribution at the helm since 2017 and ensuring he was generously compensated on his departure.
Industry insiders said he could be a polarising chief executive in his pursuit of Strike’s interests, banging heads with other players, including Hancock.
Mr Kavonic acknowledged that Mr Nicholls’ “sharp elbows managed to rub some joint venture partners the wrong way over the years”, but he argued that few energy chief executives had created more value.
“He transformed a company that in reality was worth negative when he joined, to one that delivered over $600 million in value - a value creating feat that very few CEOs in Australia’s energy sector can claim to have come anywhere close to in the last decade,” Mr Kavonic said.
Mr Nicholls has stepped down from the board and will leave Strike on February 14, to be replaced on a temporary basis by board member and former Woodside Energy executive Jill Hoffman.
More to come
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