IAN GOWRIE-SMITH, the mining and pharmaceutical entrepreneur behind Skyepharma, yesterday announced plans for another oil and gas flotation on Aim.
Kea Petroleum will raise £6m to help explore oil and gas finds in New Zealand. It already owns three permits in the Taranaki and Northlands basins. Kea marks a return to oil and gas exploration for Gowrie-Smith, who last year sold off his Papua New Guinea-focused Rift Oil to a Canadian group for £115m.
The team that ran Rift have regrouped to run Kea, including executive director David Lees, and is now focused on the more established oil and gas industries in New Zealand.
“In Papua New Guinea, the site could only be reached by helicopter. Getting people in and getting the oil out was a massive problem and very costly,” Lees said.
“The team has now moved to Kea and to New Zealand, where there is already a prolific oil and gas industry. The infrastructure is there, and so are the customers.”
Kea has agreed a contract with Canada-based Methanex, which will finance the development of one of Kea’s wells in exchange for a share of profits and a supply contract for its gas.
As well as the share placing, Kea has already raised £7.2m from investors who had previously backed Rift.
The company hopes to begin work on its gas wells within a month and will use the money raised in
the float to look for new oil sites in New Zealand.
The Australian entrepreneur made his name in the City with pharmaceutical companies. First came Medeva in the 1980s, a stock market star until it was hit by manufacturing problems.
Then he set up SkyePharma, named after his daughter, Skye, which also started out as a high performer. But the results ultimately failed to come through, and Gowrie-Smith was eventually forced out of the company by shareholders unhappy with his record.
A reputation as a somewhat flamboyant character, Gowrie-Smith has been known for driving a yellow Ferrari - a car he since described as “an expensive mistake” during his “male menopause”.
Gowrie-Smith started out in the mining sector and has been chairman of other mining stocks such as Aim-listed Triple Plate Junction, and Canadian tungsten miner, Tiberon Minerals. His ventures in the oil industry have so far proved lucrative. The 61-year-old pocketed more than £9m for his stake in Rift and will be hoping for a similar return from Kea.
RBC CAPITAL MARKETS
Kea executive director David Lees yesterday told City A.M. the company had all the funding it needed to exploit its existing sites, thanks to the deal with Methanex and the £7.2m from investors who had made healthy profits in Rift. But feeling there was an appetite in the market for fund raising, Lees and Gowrie-Smith appointed global brokerage RBC Capital Markets to see if more investors could be brought on board. Leading the team at RBC is Matthew Coakes, who joined the banking group in December from Goldman Sachs along with Josh Critchley. Royal Bank of Canada, which owns RBC, is busy beefing up its business in the UK, having escaped the financial crisis largely unscathed. It has a fairly robust balance sheet and did not receive any state aid, and is keen to expand its UK presence.