Glass half full fuels oil captain

The oil and gas industry is Rick Webber's life. He tells Marta Steeman that his new challenge is to turn a small Wellington explorer into a more significant player with critical mass.
Rick Webber was pretty clear early on he did not fancy being stuck in an office all day pushing a pen. His academic strengths were maths and physics, and the question for him was how he married that with a love of the outdoors.
The New Plymouth Boys High School old boy and Auckland University graduate was unsure what he wanted to do in the early 1970s. So he returned to university to complete a masters in physics. He was toying with the idea of becoming a hard rock mining engineer in the Australian outback, but the mineral industry then was at a low ebb.
"I needed to do something that was going to be out in the fresh air," the new chief executive of small Wellington-based explorer Austral Pacific recalls.
He registered with Auckland University's careers section and out of the blue some months later he received a note about a French company, Schlumberger, coming to the university that might have the kind of job he was looking for.
Schlumberger is a French multinational providing field services to the oil and gas industry. Its core business is electric wireline logging, which electronically measures certain formation parameters down wells, such as background natural radioactivity, porosity and resistivity and density of the formation.
"Even to this day electric wireline logging is probably the most significant piece of data gathering that an oil company undertakes when it drills a well. Usually the results of the wireline logging dictate the future of the well."
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He cut his teeth in the oil and gas industry working on oil rigs for Schlumberger from 1974 to 1981, between the age of 23 to 30. He was on the move from country to country and rig to rig – four years in Kuwait, Oman, Saudi Arabia, Dubai, Abu Dhabi and 3½ years in Western Australia, New Zealand, Brunei and Indonesia.
As an engineer, he lowered tools down the well and reeled them back up to measure several parameters and interpret the results. No alcohol or drugs were permitted on rigs. "If you are caught with alcohol on a rig, you're finished. It's the sort of environment when guys are thrust together in those sorts of circumstances they tend to have lots of fun."
The work was arduous. "Otherwise, you amuse yourselves by eating four large meals a day and watching videos and reading magazines."
During that time he married a girl from New Plymouth he had known from his teens. He had bumped into her while at home on holiday.
He worked his way up through the company hierarchy from trainee field engineer to field service manager.
"The longer I spent at Schlumberger the more I came to appreciate there was much more to the oil and gas business than just running wirelogs."
He had spent a lot of time working with oil companies and knew which ones he wanted to work for. He approached British Petroleum in Wellington while on holiday, and some months later he took a position at BP, marking the beginning of 18 years with the oil firm.
His first position was in the planning and management of their natural resources in New Zealand, which included their interests in the Kapuni and Maui gas fields, but also in their gold mining and forestry businesses.
After three years he was on the move again with a posting to London in 1984 where he was manager of pipelines and systems for their North Sea and Western European businesses.
In 1988 he returned to New Zealand and took part in changes in BP's business, including the sale of assets when BP decided to exit exploration in New Zealand. The family moved to Melbourne in 1991 where he became commercial manager for BP's exploration business in Papua New Guinea.
He returned to New Zealand in 1994 to head BP New Zealand's business, which was oil products and petrol wholesaling and retailing, and its refinery assets, by that time much the same as it is now.
On the move again, in 1997 the family shifted to Perth where he worked on the expansion of a liquefied natural gas project on the North West Shelf. That was his last job with BP.
The Asian economic crisis from 1997 to 1999 led to oil prices falling to below $US10 a barrel, and the lng project was canned because it was uneconomic. BP was looking to reduce staff and he took severance.
He moved to head Fletcher Challenge Energy as its general manager in charge of its New Zealand businesses. The job offered him the chance to come back to New Zealand, with "a reasonable prospect" that Fletcher Energy was to be spun off as a separate listed company from the rest of the Fletcher empire.
Staff had high hopes of that and were disappointed when Fletcher Energy's board opted for Shell's offer and Shell bought the best company in the bunch in 2001-02.
Ironically, Shell in Australia had tried but failed to gain the consent of the Australian Competition and Consumer Commission to buy the other 66 per cent of Woodside it did not own. It had plans to form an Australasian business from Woodside and Fletcher Energy.
The competition watchdog said the Woodside assets were too important to Australia to be taken over by Dutch-based Shell. So that part of the strategy was dead and the strategic acquisition of Fletcher Energy's oil and gas production assets such as Maui and Pohokura no longer made wider sense.
After 2002 he took time off, renovating and landscaping a big property the family had bought on the outskirts of New Plymouth, and doing some consultancy work.
But last year he decided to throw his hat back in the ring when he saw the opening to head Austral Pacific and approached chairman David Newman. A Houston-based company was carrying out the search for a chief executive and he secured the job which he started in February.
"It's by far the smallest company I have ever worked for," he says. But he relishes the different challenges in being directly accountable to a board and shareholders. Such is the smallness of the company, local shareholders at times e-mail him directly to ask about company issues.
Fulltime staff number 14.
He has picked up the baton from chief executive Dave Bennett who stepped down last year after eight years of taking the company from small beginnings to being an established, but still small, player.
The mission of the Austral board, led by Mr Newman, is to expand the company and Mr Webber has been engaged for a new phase of expansion – taking the company from "a Mum-and-Pop operation", as Mr Webber describes it, to being a serious listed exploration company.
He said at the annual meeting in April he wanted to see expansion in the medium term from a company with a $50 million capitalisation to one with $500 million.
Inevitably that requires mergers or acquisitions. "In my opinion, size is everything in this industry."
Small explorers such as Austral Pacific are shunted about in the queue for services such as drilling rigs.
Access to people is more difficult too, he says.
"Like it or not, there is a pecking order and the small junior explorers like Austral Pacific are well down that."
An exploration company needs critical mass to expand and have sufficient clout with other players in the industry. Organically growing the company is not quick enough. "I don't want to hang round for that," he says.
The aim is to achieve an enhanced exploration and production portfolio from mergers or acquisitions. Greater size will give it better access to capital markets.
What happens to Austral Pacific in the process? Could it be taken over?
"As a listed public company that is always on the cards. Our share price is low at the moment. It has been low for some considerable period of time. The company is to some extent vulnerable. There's all sorts of good reasons wanting to pursue an M & A strategy as well which might have a defensive aspect to it."
Asked if he can see Austral having completed an acquisition or a merger by the end of the year, Mr Webber says he is not prepared to set any goals on that.
"What I can say is we are actively looking at opportunities to grow our business through M & A activity and we have some irons in the fire."
The only institutional shareholder of note in Austral Pacific is Infratil which bought a strategic 11 per cent stake last year in a placement of shares to fund company activities. Mr Newman is also chairman of Infratil.
Otherwise its shareholders are about 7000 North American investors and about 500 locals. The latter bought in early in 2004 when Austral issued new shares at $2 each to raise $8 million for a drilling programme in Taranaki. The company was founded in 1979 by North Americans.
One of the company's big gas prospects is Cardiff, which has captured local interest because of the rundown of the big Maui field and the need for new local gas sources.
He acknowledges Cardiff has been disappointing so far. However, "I think there is still a significant prize waiting to be opened in Cardiff."
Austral will give an indication of Cardiff's resource potential by the end of the year. The joint venture partners are considering putting the rig back on the Cardiff well and testing the deepest gas zone, the "K3E interval", the zone where all the potential lies. The testing will probably be done in the next few months.
"I want a result on the K3E and a view on the resource potential."
Austral would be looking to put together a programme of drilling on the Cardiff structure in 2007 depending on the results of the 3D seismic survey and testing K3E.
"We will undertake another round of seeking finance from the market probably in about October this year."
The high-risk industry requires people with a glass-half-full view on life, he says.
These days he's not playing rugby or cricket but he's a single-figure handicap golfer and an avid reader.
"Tonight I'm going to the movies with my wife's gardening group then dinner afterwards."