Former Woodside Petroleum managing director John Akehurst is making a return to the oil and gas sector as deputy chairman of Gordon Martin’s Coogee Resources, which is planning to develop a $450 million oil project in the Timor Sea.
Former Woodside Petroleum managing director John Akehurst is making a return to the oil and gas sector as deputy chairman of Gordon Martin’s Coogee Resources, which is planning to develop a $450 million oil project in the Timor Sea.
Mr Akehurst, who left Woodside in 2003, is one of three external directors joining the board of Coogee, which is considering a possible $250 million share offer and listing on the Australian Stock Exchange.
Chief executive Peter Hood said initial production from the Timor Sea project would be at the rate of 35,000 barrels per day, which would make the company one of Australia’s largest independent oil producers.
Mr Hood said the planned $450 million development could be through either a joint venture or a public float of the company.
“We have both propositions in front of us,” he said, adding that the company aimed to make a final decision towards the end of the current financial year.
“Our focus is on starting development of the Montara project by the end of 2006, with first production in 2008.”
While Coogee is keeping open its funding options, it has already established a share option plan, which is premised on the company’s shares being quoted on the Australian Stock Exchange.
The options, offered only to invited people, can be exercised at 24 cents per share after 1 July 2007.
The board appointments also set up the company for a public float.
Coogee Resources’ chairman and major shareholder is Gordon Martin, who built Coogee Chemicals into one of Western Australia’s largest private companies.
Mr Martin has been acting executive chairman of Coogee Chemicals since Mr Hood moved from the chemical company to Coogee Resources.
Mr Martin told WA Business News that the board of Coogee Resources will include Mr Hood, finance director Jose Martins and Mr Martin’s son Tim Martin.
External directors will be led by Mr Akehurst, who is a director of drug company CSL but has generally kept a low public profile since leaving Woodside.
Other external directors will be Clough’s chief executive (services) Simon High and University of Notre Dame business school dean and former Andersen and Ernst & Young partner Derek Parkin.
The decision to proceed with the Timor Sea project followed a “significant” oil discovery at its Swift North-1 appraisal well.
Swift North-1 has the potential to contain five million barrels of recoverable oil, lifting the group’s combined reserves from the adjacent Montara and Skua oil fields to approximately 37 million barrels.
Mr Hood said the company was “keen to move quickly towards development later in 2006” in light of its new discovery and the improved price of oil.
“This latest discovery strengthens our view that the Montara development stacks up very well in both financial terms and in reserves,” said Mr Hood.
He said the company would not finalise its development plans until it completed exploration and testing at the nearby Swallow-1 prospect.
While Coogee Resources main funding task is the planned Timor Sea development, the offer information statement for its options plan disclosed that the company has substantial additional financial commit-ments.
These flow from the establishment of Coogee Resources in July 2005 and its phased acquisition of the oil and gas assets of Coogee Chemicals.
Specifically, it still owes $20 million to Coogee Chemicals from the $35 million acquisition of Coogee Resources (Oil & Gas) Pty Ltd.
The company is also scheduled to pay $33.3 million after July to acquire Coogee Montara Pty Ltd, which owns the Montara oil field.
Mr Hood said these acquisitions were made in a phased process to accommodate its cashflow requirements.
Production from the Montara field would be additional to output from Coogee’s 71 per cent-owned Jabiru and Challis oil fields, also in the Timor Sea, which were acquired in 2003.
Mr Hood said the company’s share of oil revenue from Jabiru and Challis would be about $85 million this year.
This gave it the financial capacity to conduct its three well exploration program, budgeted to cost $38 million. As well as developing the oil fields, Mr Hood said Coogee was still aiming to develop its gas reserves using innovative technology that converts natural gas to methanol.
“That is a long term project that we would like to conduct,” he said.
The company’s latest plans for the Montara project follow a 2004 proposal to sell a 50 per cent interest in the development.
Coogee halted the sale process after it decided to proceed with more drilling.
