richard cottee joins new board of akk

Austin Exploration to get Cottee makeover - AFR

Dealmaker Richard Cottee, who was ousted four months ago as managing director of Nexus Energy, has resurfaced as non-executive chairman of minnow Austin Exploration.

Mr Cottee’s reputation was built on his involvement at Queensland Gas Co, which he steered from a $20 million junior to a $5.7 billion coal seam gas player by the time it was taken over by BG Group in 2008.

He believes Austin is poised for rapid growth in shale oil and gas in the United States.

Austin had all the ingredients to repeat the sort of growth seen at Queensland Gas, Mr Cottee said yesterday, pointing to the technical skills of president and exploration director Mark Hart, its attractive acreage in the Niobrara and Eagle Ford shale regions in North America, and its positive cash flow position.

“I’m pretty excited,” Mr Cottee told The Australian Financial Review.

“Austin has got enormous upside; it has a development drilling program of about 40 wells that if 60 per cent of them come in, you’ll have 40,000 barrels a day of oil coming out in the US. This is a golden opportunity.”

Austin shares gained 0.2? or 7.1 per cent to 3? yesterday, giving the company a market value of $17.8 million.

Mr Cottee left Nexus suddenly last September after a dispute with the board over a proposed deal with a partner for one of its gas assets.

He subsequently mounted a campaign to be reinstated to the chief executive role and overturn the board.

The bid, while supported by many small investors, failed to get institutional support and was defeated.

Mr Cottee will join Austin on February 21, five months after his exit from Nexus.

He said yesterday that legal action he launched in October over clauses in his employment contract that had restricted him from taking up a new job for six months, had been resolved.

“That’s all been settled and liberty has been restored,” Mr Cottee said.

Announcing the appointment, Austin chairman Mark Hart underlined Mr Cottee’s “international energy experience, outstanding reputation for driving company market development and intense business savvy”.

“Richard is one of the strongest business executives that I have ever worked with,” said Dr Hart, who will continue as president and executive director of Austin.

Mr Cottee returned the compliment. “I wanted to go with someone that I trusted and someone who had the technical competence to support with the strategic nous that I purportedly have,” he said.

Mr Cottee pointed to several positive “omens” in his appointment.

They included the similar market values of Austin and Queensland Gas when he joined, Austin’s drilling upside and the link with Dr Hart, who he has known for 20 years and believes has “all the technical skills that I was looking for”.

“They’ve also got acreage in the Cooper Basin, which is where I started my career with Santos, so that’s another good omen,” Mr Cottee said.

Austin is preparing a share placement to raise $1.08 million to fund exploration in the US and said it was negotiating for a reserves-based debt-and-equity funding facility.

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