Special CEO Feature
The oil price has yet to reflect the general malaise of the world at large, driven in part by the continued boom in developing economies. This has supported International Oil Companies to continue to seek out more and more remote reserves and Kentz is well-positioned to support them.
New areas we entered in 2011 included Papua New Guinea, Iraq, Alaska and Korea; all projects with core clients. Cross-cultural competence has played a vital role in playing away from home and Kentz has been doing that for over 30 years.
My lesson will be to remain dynamic in our reach and capabilities in order to service the customers we really enjoy working with. After all if you’re not enjoying what you’re doing, what’s the point?”
… H gh O on u ’D nell, CEO, Ke ntz Corporaion t “What advice would you give to CEOs to strengthen their industry image, credibility, and reputation?”
The reputation and credibility of the management team of independent oil and gas companies is one of the key drivers of valuation and the ability to access capital, which for all but a few exploration companies is essential to the business model.
There are five basic steps to ensuring you as a CEO have a strong reputation:
1) Set short, medium and long-term expectations which can be delivered upon or exceeded; avoiding disappointing investors is critical. In the current environment the market treats meeting or exceeding expectation with a static or modest increase in share price, but any disappointment is met with a savage reaction on the downside. Never has the phrase “under-promise and over-deliver” been more appropriate.
2) Have some visibility and profile. There are currently 28 oil and gas companies listed on the Main Market of the London Stock Exchange, accounting for over 17% of the value and 74 listed on AIM accounting for 15% of the value. Not engaging in some profile raising activity risks the company slipping off the radar entirely, particularly for the smaller companies. Profile can be raised in the media or through speaking at investment banking sector conferences or industry conferences
3) Ensure the sell-side analysts are kept up to speed, receive the right levels of disclosure, are communicated with on a regular and professional basis and that they have access to the CEO. I believe the sell-side is increasingly influential in that not only do they influence their institutional clients, but increasingly the sector media is taking a lead from the better informed sell-side analysts.
4) Be consistent with messaging, allowing audiences to digest a simple message to potential investors and the wider industry. In this regard, it can be beneficial for CEOs to become known for a theme which is linked to the messaging.
5) Engage an adviser who knows the sector (it can be technical after all), has enthusiasm for your business and knows the competitive landscape.
Well organised communications and investor relations for companies which rely on the equity markets to execute their business models has to be a priority and has to be invested in. Broadly, the better the reputation of the leader, the higher the valuation and thus the more efficient the equity capital.
…Bll
i y Cleg a gng Dieto,Sta gc Com u c ti ns Divson,ii F
g, Mnai rc r uti r tei fomr m nia o TI Cons l ng( r ely Fn nca yna is i a i l D mc).
Billy Clegg is a Managing Director at FTI Consulting’s Strategic Communications Division (formerly Financial Dynamics). Billy heads the London Oil and Gas team and advises companies such as Faroe Petroleum, Ophir Energy, Bridge Energy, Cove Energy, Volga Gas and Amerisur Resources.
Drillers and Dealers :::
::: December 2011 Edition
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