The Australian - The Deal - - Briefing -

IN 2004, WHEN PERTH GEO­PHYSI­CIST Cath Nor­man made a trip across the coun­try to play pro­fes­sional beach vol­ley­ball, she also made an ap­point­ment to dis­cuss an idea with some play­ers in Melbourne’s re­sources sec­tor crowd.

Nearly a decade later, the Africa-fo­cused oil and gas com­pany that evolved out of that meet­ing, FAR Limited, plans to drill five off­shore ex­plo­ration wells, cost­ing tens of mil­lions of dollars each, on its leases in the next 18 months.

In oil ex­plo­ration, this is where the rub­ber hits the road. FAR wants to drill projects in Kenya, on the east coast, where ma­jors are mov­ing in af­ter a slew of gas dis­cov­er­ies in Mozam­bique and Tan­za­nia, and on the other side of the con­ti­nent, in Sene­gal and Guinea-Bis­sau. “We’re at the stage where our projects will be tested with the drill bit over the next year or 18months, so we have loads of bites at the cherry,” man­ag­ing di­rec­tor Nor­man, 47, says.

The meet­ing that started it all was with Nic Limb, now FAR chair­man, who­mo­bilised the likes of in­dus­try stal­wart Rob An­nells to hatchNor­man’s plan for a nim­ble com­pany that would useBHP Bil­li­ton min­eral ex­plo­ration tech­nol­ogy to look for oil and gas.

At the time, Nor­man­was a con­sul­tant in­Perth, hav­ing re­turned from Lon­don with her hus­band and new son Thomas af­ter 10 years in­Bri­tain, where she­hadrun a busi­ness us­ing air­borne equip­ment to iden­tify the best places to drill.

In the Bri­tish job, which she chose at the ex­pense of a reg­u­lar spot in the Aus­tralian in­door vol­ley­ball team, her clients were the world’sma­jor oil com­pa­nies and­her­patch stretched­fromAfrica to the North Sea. This, no doubt, gave BHP Bil­li­ton con­fi­dence to let her use its tech­nol­ogy. “BHP’s new ven­tures depart­ment gave us [a list of] 10 coun­tries. Of the 10, therewere prob­a­bly three I was pre­pared to go into, one of which was Kenya.”

FAR’s use ofBHPBil­li­ton’s Fal­con air­borne grav­ity gra­diom­e­try sys­tem – to which ac­cess was granted in re­turn for first right of re­fusal – turned out to be limited. How­ever, use of the re­sources gi­ant’s rep­u­ta­tion was not. In the boom years of 2005- 06, when there were many small oil and gas com­pa­nies, oil prices were ris­ing and funds easy to ob­tain, the agree­ment gave Nor­man an im­por­tant edge. “It was fan­tas­tic. I could go to gov­ern­ments and say: ‘Look, wemight be this $ 10 mil­lion com­pany you’ve never heard of, but we have this big brother and we have its tech­nol­ogy. That gave us seats at the ta­ble we prob­a­bly wouldn’t have had.”

At Curtin Univer­sity in Perth, Nor­man stud­ied geo­physics, which is the science of work­ing out what is un­der­ground with­out dig­ging or drilling, us­ing­meth­ods such as test­ing how con­duc­tive the ground is for elec­tric­ity.

She started work­ing with min­er­als in Bowral, NSW, and, af­ter stints in Hous­ton and Perth, moved to Lon­don at the age of 28. At the time she had been in the national vol­ley­ball team for seven years, as well as be­ing cap­tain of theWest Aus­tralian team.

With a mar­ket value of about $65 mil­lion, FAR is still a ju­nior, but its staff has grown­fromjust the one, Nor­man, to about a dozen.

Si­napa oil dis­cov­ery

It’s a risky busi­ness, but hav­ing five wells in dif­fer­ent lo­ca­tions spreads that ex­po­sure. The first well to be drilled is in Sene­gal, which has leapfrogged Kenya as the com­pany’s lead­ing prospect, thanks to aMarch agree­ment with Bri­tain’s CairnEn­ergy. Cairn is chaired by founder Bill Gam­mell, the older brother of me­dia mogul Kerry Stokes’ lieu­tenant, Peter Gam­mell.

An $80mil­lion well will be drilled at Cairn’s ex­pense early next year and FARwill re­ceive $10 mil­lion. FAR be­lieves this well, the first drilled off­shore in Sene­gal for two decades, has a 25 per cent chance of suc­cess. Drilling is ex­pected to start in Guinea-Bis­sau around the mid­dle of next year.

In­Kenya, the drilling of twowells in dif­fer­ent blocks has also been de­layed till at least the mid­dle of next year while deals with farm-in part­ners likeCairnare sought. Still, Nor­mansays, ear­lier drilling planned by other par­ties means the de­lay will ben­e­fit FAR. “Some of our share­hold­er­smight be dis­ap­pointed we are not drilling early, but all of the three­main [pe­tro­leum] plays iden­ti­fied off­shore in­Kenyaw­ill have twowells drilled in them. Wewill have the lux­ury of sit­ting back and see­ing which works be­fore we drill and I think that’s a fan­tas­tic po­si­tion to be in.”

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