I, like many shareholders, knew of the ongoing succession plan and that he would go "at the right time". The board has decided Richard Cottee is no longer required. He is a master strategist and visionary. His job is done; the right people required to implement the plans have been engaged. The company has never been in better hands.
I am told by reliable sources that the FAR article is a very good summary of the situation. In case you haven't seen it, here it is again;
Central Petroleum exit renders Richard Cottee mute by Matthew Stevens
Richard Cottee is usually a man of many, many words. But news that he is to "cease employment" at Central Petroleum reduced the gas driller's now former chief executive to just two words in a combination that friends insist he has never before used.
"No comment."
Now it would be fair to say that the wider gas industry is surprised that his job in Northern Territory gas is so abruptly over.
As recently as June 6 the Central board confirmed a two-year extension of Cottee's contract after announcing a strengthening of the company's management that, in part, was aimed at pursuit of an "orderly succession plan".
It is hard to accept that orderly meant regime change in 55 days, so we have to imagine that there has been a sudden change of heart.
As a result we have a succession plan that will see Cottee formally take his leave on January 31 next year but that means he has already left the building.
Interestingly, given the perception of ** created by the way this announcement has been made, a long-time Cottee lieutenant, Leon Devaney, has been drafted in as Central's acting CEO.
Devaney, who had been chief financial officer until Tuesday, joined Central in 2012 as a result of the sometimes ugly boardroom coup that saw Cottee replace founding chief executive, John Heugh. Before that Devaney spent seven years working with Cottee at Queensland Gas, the $30 million coal seam tiddler that he transformed over six years into a $5.7 billion takeover target for BG Group.
Even in an industry that embraces the unconventional, Cottee is an exotic. Strong willed, energetic, loquacious and often just intensely funny, Central's former boss is also the creator of substantial wealth through his pioneering efforts in coal seam gas. Central was his third coming in the gas business after a second tilt at glory with Nexus Energy turned very sour indeed.
Cottee is all the more compelling because he has, until now at least, been prepared to say what he thinks. At a recent gas industry panel in Queensland, he described the various environmental lobbies that have lined up against gas development as "Tofu tyrants".
Inevitably, when you are forthright in pursuing your commercial interests, you can make enemies along the way. His relationship with the gas pipeliners of Australia has been a case in point.
At times during the past four years or so Cottee's was a voice of complaint consistently loud enough to inspire government and regulatory scrutiny of the cost of accessing long-established, unregulated pipelines. Cottee continues to assess pipeline as a key choke-point of the east coast gas industry's capacity to respond to shortage and rising prices.
The pipeliners see things somewhat differently. They receive Cottee's legacy as their world of public pain built on claims they identify as baseless and that have been seized upon by politicians and a regulator that needed to be seen responding to spiking gas prices.
Interestingly, news of Cottee's fate was greeted with less surprise by the pipers than by the man's peers in exploration and production. That is because there is a view that Central is struggling to meet the production milestones that will see it able to fill the new Northern Gas Pipeline when it opens up the spigots later this year.
Cottee's playbook for Central was always about seizing the moment of the east coast gas shortage to revitalise a community of stranded gas assets in the southern reaches of the Northern Territory. The reason Central's gas was stranded was that no one outside of the Northern Territory had ever needed it before. As a result there was no pipeline eastwards.
Cottee arrived at Central believing he had new markets for gas and all that he needed was a way of getting his gas east. He leaves the business with the a pipeline nearing completion and at least one major Queensland customer locked in to take his gas.
According to Devaney, "Richard, myself and the management team" had been talking succession "for a number of years".
"So the concept of renewal is not new," he said. "The real question was around timing, when is the trigger pulled? The board has drawn the conclusion that the timing is right, in light of where the company currently is and where it needs to go," Devaney said.
"Where we sit today there is an enormous amount of project delivery to be done, drilling facility upgrades to ensure the delivery of firm volumes to customers, most notably to Incitec Pivot, once the NEGI opens later this year," he said.
"What worked five years ago needs to evolve so we are prepared to go into the future. Five years ago was all about exploration; now the priority is developing markets," he added.
"I have nothing but respect for Richard and what he does, what he has done and what he brings to the industry. There are a lot of really smart people floating around, a lot of strategic thinkers. He has all of that plus he has the day-in, day-out energy and enthusiasm to make things happen," he said.
So, remind me again, why is he gone?
.................... end ...................................
Denny Crane
CTP Price at posting:
12.5¢ Sentiment: Hold Disclosure: Held
