Special CEO Feature
Looking back on 2011, what lesson(s) will you take into your business planning for 2012?
“2011 was a very choppy year; we’ve all been challenged by the volatility of the markets. We’ve had our ups and downs. In our business, in the small cap end of the market, every well is like a referendum on the future of the company. The thing we’ve learned is that you have to stick with your vision; you have to have tenacity and sail through those ups and downs. You drill your wells and you know you’re doing the right thing, ultimately, if you’re adding value the market will recognise that.
We moved into Kurdistan in 2011. The day we announced two blocks in Kurdistan, which we were delighted about, our share price went down. We couldn’t understand why, but the market saw them as liabilities. Three months later, exactly the same blocks, suddenly we’re heroes because ExxonMobil moved in next door.
We drilled wells in Algeria which did not perform exactly as we expected, and the share price didn’t respond as expected, but ultimately at the end of our programme, we added value in Algeria. The lesson is you can’t watch the share price every day. You’ve got to stick with your vision. Ultimately value will out. For us, 2012 looks like a better year. We’re optimistic the capital markets will open again both on the debt and equity side in the first quarter of 2012, especially if the Eurozone is sorted. We’re not relying on that, but we’re optimistic that will come through.
From an operational point of view, we’re about to get a big receivable from Enel - £100m plus, and a further £30- 40m in the middle of the year. That’s enough to fill our acquisition aspirations and we intend to grow our business and enlarge our portfolio in 2012. We’re confident we will grow the company and add value.”
Are you hunting for a company to acquire?
“I wouldn’t say we’re hunting for companies, we’re hunting for assets. If assets come with companies, then maybe. But we’re happy with what we have in Algeria and Kurdistan. The arrival of a technical government in Italy means that probably the offshore Italian drilling ban will go away. We have a very good asset there that we’re hoping to go back to in 2012. We’ve had a choppy year, but things are looking rosy in 2012 and we’re looking forward to the future.”
Why have you come to The Oil Council Assembly today?
“The Oil Council has managed to put together a great group of people. It’s a good combination of industry players – investors, advisors, bankers – and it’s a great opportunity to talk to lots of different stakeholders in our business and swap stories. That’s why we always come. We appreciate the opportunity to talk to a thousand of our closest friends, and we’ll be back next year for sure.”
… Br ian O’ hinCat a , CEO, Peroet cltic I =============================================== What trends do you see continuing into 2012?
“It’s very hard to predict because of the volatility. In this part of the year it will depend on what happens in the Eurozone. If we can get those problems solved relatively soon, even if just a short period of stability, things will be very different in Europe. That’s a big unknown. When you talk to the banks at the moment, the new phrase is that ‘volatility is the new stability’, in other words there’s an acceptance that this instability will continue for a few months yet.”
When you look to 2012, what excites you?
“In terms of what to look forward to in 2012, Africa is a very interesting place to be doing business in the oil and gas space. The Middle East also has some amazing opportunities. Obviously, we’ve had the Arab Spring, but as things start to settle down a bit and I think things will return to normal. Maybe the slightly surprising one is Russia. It’s very clear the Russians have reopened the doors with their big deal with ExxonMobil and their arctic joint venture. I’m fairly confident we’ll see some additional deals coming up in Russia very soon.”
What assignments are companies coming to you for?
“Many of the deals we’re doing now because of the instability in the financial markets are very much at the asset level. So its oil and gas companies cutting out the risk that comes with corporate activity and listing and instead investing straight in the asset, and at the moment there are some great deals to be had – I see that as an area of
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Drillers and Dealers :::
::: December 2011 Edition
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