FORMER Hardman Resources chief Simon Potter has taken up a position at leading Queensland LNG proponent Arrow Energy to run its international arm and steer its partial float later this year.
FORMER Hardman Resources chief Simon Potter has taken up a position at leading Queensland LNG proponent Arrow Energy to run its international arm and steer its partial float later this year.
Arrow, which is developing its wholly owned $2.2 billion Fisherman’s Landing LNG plant in Queensland to produce gas from inland coal seam gas (CSG) reserves, last week revealed it would float its international CSG interests in the second half of this year.
Oil giant Shell previously paid $75 million for a 10 per cent stake in Arrow Energy International, implying a $750 million price tag for the whole business, while analysts have independently valued it between $500 million and $1 billion.
Arrow, however, plans to retain up to 70 per cent of the company, indicating the float will raise $100 million to $200 million in new funding.
Mr Potter’s appointment as chief executive of Arrow’s international arm, which takes effect in April, is his first executive role since UK group Tullow Oil bought Hardman in a friendly $1.47 billion bid in 2006.
During his two-year stint at Hardman, Mr Potter consolidated the company’s Mauritanian oil operations and co-charted its push into Uganda, where it made the nation’s first major oil discoveries.
Since then, the former BP executive has maintained a low profile, working as a consultant and in non-executive roles, such as his chairmanship of WA oil and gas explorer Rialto Energy.
Mr Potter said he was attracted by the prospect of again running a company with enormous untapped reserves, close to major energy hungry market with the potential to achieve rapid growth.
Arrow Energy International holds substantial coal-seam-gas permits in China, India, Vietnam and Indonesia, with strong near-term production potential. Just one of Arrow’s Chinese project areas is estimated to contain 6 billion tonnes of gaseous coal.
“There’s an old adage about reserves and markets – each of these four countries has staggeringly large markets for power, and the close proximity of large reserves to those markets makes a compelling commercial case,” Mr Potter said. “And the fact that the reserves are so large gives you quite a healthy growth trajectory.”
He was also attracted by Arrow’s desire to provide the freedom needed to achieve that growth without being subordinated to main Australian LNG-based business.
“Of course from my point of view there is a level of independence in the sense that you’re there to get on with it without distracting from the main objectives of Arrow,” Mr Potter told WA Business News.
While the initial focus would be on supplying energy to the nearest domestic markets, he said there was also great potential to later become an LNG exporter through its access to Arrow’s expertise. The company’s vast CSG assets in Indonesia are relatively close to existing LNG capacity that is fast running out of conventional gas supplies.
A listing in Hong Kong or Singapore is considered most likely.
