Drill down under for oil profits off coast of Australia
CLIMATE change activists may be causing havoc across the country but a simple fact remains: the world depends on oil and gas and will almost certainly continue to do so for some time.
Boris Johnson is set on pursuing a green agenda but as recent spikes in oil and gas prices show, demand for these hydrocarbons persists and is expected only to increase over the coming years.
Advance Energy hopes to take advantage of the global reliance on oil. Founded in February 2020, the business targets oil fields that have already been discovered but are currently underdeveloped or underfunded.
Chief executive Leslie Peterkin then strives to use his experience and industry contacts to unlock the full potential of these assets and deliver substantial rewards to shareholders.
Peterkin, 67, has spent 40 years in the oil industry, including a decade at Shell, followed by senior positions at Australian majors Woodside and Santos. He has also acted as a consultant for independent energy firms, each time charged with turning neglected assets into valuable and highly productive oil fields.
Now, he is determined to prove his mettle at Advance, supported by chairman Mark Rollins, another oil veteran.
Their first project is Buffalo-10, formerly owned by commodities giant BHP but lying fallow for more than 15 years.
Situated between Australia and East Timor, the Buffalo site produced oil for several years but no technology was available to assess and exploit its full potential.
Techniques have advanced significantly since then and independent analysis suggests that up to 34 million barrels of oil are lying below the sea on the Buffalo site. A drilling programme starts next month and, should the analysis prove correct, it will be a game-changer for Advance.
Confidence is high, so much so that discussions are under way with lenders and contractors to take this site to production by the end of 2023, producing around 30,000 barrels a day in year one and 40,000 thereafter.
From the start, Peterkin felt the company could best deliver shareholder rewards if it adopted a joint venture approach to each asset, where Advance provides expertise, industry contacts and funding, while the other party focuses on day-to-day operations. Australianlisted Carnarvon is Peterkin’s partner on Buffalo and revenues will be shared equally, but forecasters believe Advance will swiftly be able to recoup the expense of bringing the site to production and become highly cash generative thereafter.
In the meantime, Peterkin is in advanced talks on two more ventures, which should add to the Advance roster and create longterm value. There is even talk of dividends in the years to come.
Traded on: AIM Ticker: ADV Contact: advanceplc.com or 01624 681250