Richard Cottee unveils big plans for oil and gas junior by: Sarah-Jane Tasker From: The Australian March 30, 2012 12:00AM
DEALMAKER Richard Cottee has set himself an ambitious new target with a plan to take oil and gas junior Austin Exploration to the heights of his former success stories. Mr Cottee, who steered Queensland Gas Co from a $20 million junior to a $5.7 billion coal-seam gas player by its 2008 takeover by BG Group, will unveil to Austin shareholders today his so-called 500-squared plan to transform the junior.
The new chairman got the backing of the board at his first meeting last Monday to implement the project, which will be the company's focus for the next 15 months.
The "First 500" of the plan is to strip $500,000 of cost from the non-technical, non-exploration company expenditures by June 30 next year.
"That is to prove to the market that every dollar that we raise is going into the ground," Mr Cottee told The Australian.
...The more ambitious "Second 500" aims to have the company producing about 500 barrels of oil a day by the end of June next year; it now produces 0.7 barrels a day. Mr Cottee said if the target was reached it could generate about $10m in net earnings on an annualised basis.
The new chairman, who left Nexus Energy on September 22 after the board refused to back a deal he brought to it on the Echuca Shoals gas project off the West Australian coast, was hand-picked by Austin to take on the chairman's role because of his deal-making history.
Mr Cottee, who believes that Austin is poised for rapid growth in shale oil and gas in the US, said he would be judged against the 500-squared project.
"Five hundred barrels is a long way from 0.7, but I've picked that figure and I'm willing to be judged on it," he said.
"It's not a figure I plucked out of the air and I will lose a lot of credibility if I don't get near that."
But, with the board's backing, he has a vision of where he wants to go and it is to create another successful story similar to Queensland Gas.
"I want to do another QGC myself. QGC was an exceptional performance," he said.
"This is the same ticking of the boxes and being at the forefront of knowledge and I love being a pioneer. When I got to CSG, no one thought it could work -- there was no market for it. Oil shale feels the same to me, but this time I have a technical team that is better than I had in the early days of QGC."
Mr Cottee said there were three things that made an unconventional play work: the assets, the technical ability and directors who had the commercial experience to know how to grow the company -- all things he believes Austin has.
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