Reaction to management team change29 Nov 2021 15:53
Hi everyone, I've been reading this thread for about 6 months (and the other one) - lurking but without commenting. Thought I'd pipe up on the management team change. I'm confused why the market hasn't reacted more positively.
RL and VG were perfect for the first stage, but ill-suited for the next. RL is a vastly experienced rock-watcher, smart enough to see the value in the licenses, and put together a extraction plan in theory. But if you saw him in interviews, I'd say he's too old and frankly past it to bring the a major development to life over the next five years. Compare RS, he's (comparatively!) young, and has - quite literally - just done exactly what JOG holders dream of, turned a small E&P minnow into a player! Who would you want better?
VG is a ex-banker, skilled at putting the deals together but with zero real-life experience of building an operating business that is drilling into the ocean floor, managing platforms etc etc. His replacement GF is again, a proven success at this.
Why would these guys come from all the success of Ithaca, and take on anything but a project that they felt was a goer. These are not AIM lifestyle guys. I would also say that although salaries are high compared to average UK, an associate in an investment bank can make 300k in a good year (in the right spot). This project has risk of falling flat, and good people won't through 5,8 or 10 years of working life for equity only.
Les Thomas in the mix, although a 'non-exec', I bet will have a strong hand in the action to advise AB. Stanton was a oil-major grandee, and provided credibility but not practical experience like Les. But he's stuck around anyway.
In short, I think it's a silly conspiracy theory to say it's a failure and lifestyle takeover. OGA has made it publicly clear that without electrification, forget it. So that is a very good reason for a delay. It's also a good reason to change up the management team to people who really can deliver a major north sea project in GBA. I think previously the only option on the table for AB,RL and VG was a flip to another operator. The new board gives credibility to a possible major project lead for JOG.
Finally, I wanted to comment on JT Southern. He is obviously very well informed, and has taken one cynical look at an old field and cried 'turd-polishing'. Beware recently-retired experts. They can be bitter, and the fact is he hasn't seen the data. Buchan was drilled with nascent technology in the 1960s. I'm no expert but the technology has come on, er, quite a bit in the last 50 years! I don't think the field itself is in doubt.
I'm very long, so maybe wishful thinking. Another capital raise could kill it (although that would be in no stakeholder's interest), and all sorts of unknowns that might mean all for nothing.
But the new management team is a bloody good thing and as insiders to the story, they've chosen to join up and commit. It's a great punt for them, us too. Good luck to all
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