HE DARED to question, to challenge the system and he got away with it; something that is probably rather rare in the annals of North Sea history.
However, Bill Transier, a co-founder of US exploration and production junior Endeavour International, had the mettle to fight for a fair deal to transport his company’s share of Rochelle field condensate (a super-light oil) to market.
And by questioning what he described to Energy as “over-commercialisation” of the North Sea pipeline network, his view is that this will help other small companies more easily get pipeline infrastructure access.
Mr Transier has been around the industry a fair time, much of it on home turf in the US. The idea of forming a company that would carve a niche in the North Sea surfaced in the early 2000’s.
“The beginning of Endeavour was a desire on my part and a gentleman by the name of John Sykes,” he said.
“John is a former CEO of Anadarko. And I was formerly a leader of the energy practice at KPMG and later the number two at Ocean Energy.
|Bill Transier Q & A:|
Education: University of Texas – Bachelor of Business Administration, Degree in Accounting. Regis University – Masters of Business Administration. University of Houston – Law Degree
Main roles in career:
– CEO of Endeavour International Corp (2003 – present)
– CFO of Ocean Energy (1996 – 2003) – from 1996 to 1999 the company was Seagull Energy
– Partner and head of the world-wide energy practice – KMPG
What has been the hardest decision you have made in business: One of the hardest decisions I have had to make was the choice to merge Ocean Energy into Devon Energy. There was a great team at Ocean that had been built up through a series of corporate mergers. It was hard to give up that group synergy and see the years of work creating the future of Ocean integrated into Devon. However, it was the right thing to do for shareholders – it unlocked the value of the company by reducing execution risk, as well as built the scope and scale needed to continue the company’s growth projectile. Devon had an excess of cash flows from its onshore operations and Ocean had the deepwater exploration portfolio. It was the right fit.
Who do you admire in business? One of the individuals I most admire is John B. Brock III, who was the former CEO at United Meridian Corporation which merged into Seagull. John exhibited a series of core values that he passed on to all those who worked with him. He was a mentor to many and taught me a lot about the right way to support, encourage and empower those individuals working around me. John was key in Exxon’s offshore discovery, in Equatorial Guinea, of the Zafino field which at one time was one of Exxon’s 10 largest fields in the world. He was always willing to share his technical expertise and his enthusiasm for the industry.
What do you regard as being your greatest success to date? For me, the founding, development and growth of Endeavour has been my greatest success. When we started in the North Sea there were over a hundred small/mid cap companies active. Endeavour is now one of only a few remaining independents with a viable portfolio and the ability to significantly ramp production and cash flows over the next several years.
Also, we have built a top quality team in the UK and our ability to attract some of the industry’s top talent in London and Aberdeen speaks to the quality of the opportunities the company offers.
I am also proud of the leading role Endeavour has played in various key North Sea issues, such as access to infrastructure. I truly believe our stance on this subject and other key market concerns have positively impacted on the industry’s ability to move projects forward.
What do you do to relax? Golfing, hiking and reading
Where is your favourite holiday destination? Pebble Beach, CA
What charity do you support? I am most involved in charities that work with “at risk” children
If you were not in the job you are in, what job would you like? Professional golfer
“We had known each other for 25 years and it just so happened that Ocean was sold to Devon in June 2003 and John left Anadarko in about March that same year.”
They discussed the idea of setting up a company . . . one that would pursue opportunities in a “proven petroleum system” and where the gate price was affordable.
The North Sea fitted the criteria set and so, with an initial $20million or so in the pot, Endeavour was launched in 2003 and the hunt began, armed with the first regional seismic dataset ever created for this energy province.
“Barriers to entry were fairly low because the cost of bidding licences was not high,” said Transier.
“We couldn’t compete in the Gulf of Mexico because we didn’t have the capital to put into bidding rounds. The 80,000sq.km of 3D seismic was a great tool for us to participate in licensing rounds. We did very well over the first couple of years, both in Norway and the UK; capturing acreage to go and work.
“We had a lot of aspirations about exploration; we started out drilling some wells in 2005 but without much success. The market was critical of us, as you would expect. In 2006, John said he wanted me to run the company; we always knew that would happen, though he remains on our board and is a major investor.
“I took a relook at how we were taking on exploration risk and since that point we have had about an 85% success record in the North Sea. We bought a package of assets from Talisman in 2006 . . . about 40% oil and about 60% gas including Goldeneye,” said Mr Transier, adding that the company’s Rochelle asset was part of the deal too.
“It was deemed to be a very small, fallow . . . I thought it was oil until we drilled it and realised what we had.”
The main focus for Endeavour is on securing acreage where there is a high chance of viable hydrocarbons. The Rochelle project is an excellent example of this. It is also the battleground chosen by Mr Transier to sort out the access to infrastructure issue that has caused pain to many more companies than just Endeavour.
Had the company’s partner in Rochelle, Nexen, been more co-operative with regard to linking into the Scott platform, which it also operates, development of the Greater Rochelle area would be more advanced than it is today.
Sorting out Rochelle or making headway with other projects like Bacchus, or the huge gas field known as Cygnus, or Columbus, has all taken longer than expected.
“We expected to turn Rochelle on almost two years earlier than has proved possible and we anticipated that others like Bacchus and Columbus to be onstream. Ramping up new production is important, even though we also bought equity production from Talisman.
“That said, I’m also very pleased about Endeavour’s progress. I think we’ve also stood up for ourselves and the industry. The (Rochelle) determination process has been good for the industry,” said Mr Transier.
“I was involved with the same issue in the US in the 1980s. I wrote a book on open access. I know a lot about the subject because I had worked a lot with pipeline companies.”
“In the North Sea, there is no question that the pipeline infrastructure was built by the majors who took the primary risk and investments up front. But they’ve had a complete return on that, funded by the way, by the UK taxpayer in a very significant way.
“Delay is a killer, especially for junior oil companies; even well-found ones.
“The drag on having capital investment with no return is incredible and that’s what kills small-cap companies in this industry.
“Here’s a great piece of evidence. When we started Endeavour there were probably 160 small cap companies trying to scratch and claw in the North Sea.
“Today I would argue that there are probably fewer than 10 of us that are viable businesses. The capital markets have sorted that out. But there are a number more that will go away in the next 12-18 months.”