I attended today's briefing. Following are the major points made...

I attended today's briefing. Following are the major points made by Richard Cottee [please excuse the typos but this has been written on my birthday with half a bott. of Tasmanian Pinot Noir down the hole].

CTP's Internal Problems
Cottee started out by saying that "after the recent ructions, it is now time for healing". With the change of guard he hoped we would all now concentrate on working out CTP's future.
He sees great parallels between CTP's current situation and that of a number of major Australian oil and gas companies in their early days. He cited three: Santos in 1963, Woodside in the early '80s and QGC [prior to the BG takeover].
Future for CTP
CTP's vast acreage [68 million acres, the same area as France, two thirds the size of Texas]is capable of yielding huge reserves of oil, gas and, eventually, coal and helium. The potential 47 TCF of gas, for example, should be compared with Australia's current useage of 2TCF - ie. close to 25 years of current annual consumption rates.
It is also very well situated close to already existing road, rail and pipeline infrastructure [eg. the Southern Georgina basin permits are onlt 150 kms from the Queensland Bolera Pipeline.
While the acreage is unambiguously good, we should see it as a three generation asset. If we compare it to the Cooper basin, fro example, ours in the first generation while the Cooper is in the third.
CTP's overriding problem is the same as theirs in their early days: "capital starvation". The three core strategies they used to overcome it and which CTP must adopt are as follows.
1. Branding
CTP must be acknowleged by shareholders as being the company for oil and gas in its region, just as Woodside, for example, is the company identified by SH as the company for the North West Shelf; and QGC is in Queensland for coaal seam gas.
2. Use Other People's People
CTP must use OPPs, eg. through farm-ins, to gain the expertise it needs to exploit its resources [cf. Santos/ Delhi, Woodside/Shell and QGC/BHP]
3. Get Hooked on "OPIUM" [Other People's Money]
- through farm-ins etc.The question is not whether we can achieve our objectives with or without dilution but in what form the dilution should be.
Capital Raising:Farm-ins vs. equity raising
While encouraging farm-ins, RC wants to retain CTP operational control of a proportion of the CTP acreage to ensure CTP retains expertise in its own right.
CTP is currently undertaking a number of farm-in negotiations. RC refused to be drawn on naming companies or giving timetables; although he said we might expect to see "one or two by the end of this year" around the Surprise field.
While he refused to dismiss going to the equity market, he said he was firmly of the view that equity capital raising was not being planned.
He also said he was not trying to get "this company taken over. I want to grow this company".
Core Acreage/Activities
- Amadeus and Southern Georgina basins
- Oil and gas [coal lower priority in the short term]
Amadeus
- Western: very big oil kitchen [more than 200 kms], with high quality oil, with a high possibility of substantial unconventional deposits underneath. It is likely to be comparable to the Cooper in quality and size.
- Eastern: highly gas prone.
Southern Georgina
The great potential of this basin has been enhanced by Norway's Statoil coming in on the Petrofrontier/Baraka joint venture.
CTP would be pursuing a strong farm-in strategy to realise the huge potential of its Georgina tenements.
CTP's blocks indicate a deeper field therefore better because of gas saturation.
He believed that because of his excellent contacts with the Queensland Government he would havea good foot in the door in getting approval for CTP's applications for the Qld. Georgina tenements.
Gas price
This is likely to remain high relative to US gas prices, in spite of the doomsayers' predictions, because of the "wonderful" advent of unconventional sources. China, followede by India, followed possibly by Africa, will continue to demand proportionally higher energy because of the stage of their economic development [eg. China's energy demand is currently growing at twice the rate of its GDP growth, compared with Australia wher energy demand is growing at half our GDP growth rate.
Capital Requirement
The amount needed to realise our vast resources is "quite daunting" and requires CTP to do tye following.
1. Run on the smell of an oily rag - ie. ensure maximum efficency in our programs, eg. with EPT ensure programs are run simultaneously rather than sequentially.
2. Treat the locals [indigenous people, local business groups, state and federal government reps. et al] with dignity - consult on programs and be accessible.
CTP's Priorities
1. Get the litigation out of the way.
2.Actively pursue the farm-in negotiations around Surprise and the Southern Georgina.
3. Complete the EPT and 3D/2D seismics at Surprise.
EPT/offtake
They're currently getting out around 300 BPD but because the drill is horizontal there's a lot of s**t to get out first.
In response to a question RC said that they're prepared to negotiate for a rig but will not do so if the budget for it isn't there.
They currently have a temporary offtake agreement in place with Santos and when they see the results of the EPT and can give an offtaker supply certainty they will negotiate a long term agreement.
UCG - not interested in at this stage.
GTL - it's not currently a priority and any possible future interest will depend on whether there's a market.
Future of the Board
In response to a question, RC said that he accepted that at both EGMs the Board failed to achieve a strong mandate. However, it was important that the Board retain some degree of continuity. He was not convinced that an individual holder with less than 5% equity should have as substantial proportion of representation on the Board when he did not represent 95% of SH. He accepted, however, that there would be changes to the Board's composition by Christmas.
Location of Head Office
While not committing to any one location he acceptedthat in order for a CEO to be hands-on [which, he said, was his management style]he undertook to reside in the same city as that in which the head office is situated - whether it be Brisbane, Perth or Adelaide.
For what my comment's worth, RC impressed me as a person very much on top of his brief, a goal oriented, high achiever, an inspiring leader for dedicated, hard working, knowledgeable staff to want to follow andsomeone who I would be prepared to entrust for the great tasks which lie ahead to realise the vast potential this company is capable of.