10 April 2013
You can be surrounded by many advisors you trust but at the end of the day it's all about trusting your own judgment and taking the decision that you are comfortable with, says IGas Energy's CEO.Mixing effective communications, company culture and having trust in your people and your own judgment are key values that have been incorporated by the founders of IGas Energy, a leading UK onshore hydrocarbon producer. Within a span of five years Andrew Austin, CEO, IGas Energy was able to stream the company from a three-person force to over 160 employees and operational annual revenue of over GBP 80 million.
IGas which explores and develops gas and oil reserves at onshore locations in various parts of the United Kingdom started with private financing from family and friends. Although in December 2005 they concluded a joint venture with Nexen, a Canadian upstream oil and gas company, to finance some of their activities. To secure this partnership, the management team at IGas Energy ran a formal process. Austin explains: "We went out, set up a data room and invited people to come and have a look at the assets we already owned, to see whether or not they were interested in helping fund the development of those assets."
Two years later, in December 2007, IGas Energy listed on AIM to secure additional capital. "In my view, not all companies should be listed," said Austin. "But due to the growth nature of our assets, we felt that AIM would provide a market that would understand our business and would allow us to grow."
IGas Energy listed through a reverse takeover of a pre-existing company. "It may not be appropriate to all companies but to us it was particularly applicable because it minimized execution risk and meant that we could guarantee best use of our time and advisors' attention," he explained. "The only asset they had was about a million pounds in the bank. They put in the shares, we put our company in, and so we effectively had an already funded deal that covered the cost of the process."
Thinking back to the time of the listing, two things stood out for Austin as having been particularly important: communicating to stakeholders and having trusted advisors to rely on. "When you run a business that's reasonably high profile in communities, what you need is a 'social license' to operate, so you need to understand the communities in which you work, and to get your communications right. Communications to the market, to your stakeholders, to the communities in which you operate are all absolutely key. And having the right advisors in the mix, in particular the right legal advisors, really makes a difference. What stands out for me from that period of initially listing the company is that the people I trusted and worked with then, are the people I still trust and work with now."
He readily admitted, however, that finding people you can trust is not easy, and added that it was also about trusting your own judgment: "People promise lots and deliver less. You've got to trust your own judgment, but also know your own limits. Lots of people will encourage you to take on a lot in this kind of deal. It's up to you to ask the question of what you think is actually deliverable, because the next day, they've got another deal to go off and do, while you've got to continue running that business and deal with the consequences of the decisions you've made."
For Austin, the mix was patently right, and aided the transformation of IGas within a five year period from a three-person outfit to a 160-employee operation. During this transitional period, he paid particular attention to the people: "No one's going to build the company culture for you, you've got to build it yourself and be confident in your ability to carry that culture and your vision as the organization gets bigger and there are more challenges to face. This is especially true if you're acquiring businesses, because then you acquire a culture too, and you've got to make sure you can manage the integration of the companies."
Austin believes the success of IGas is due to a combination of good decisions and being in the right place at the right time. He concluded: "The extension of our business from unconventional gas into a much more rounded conventional and unconventional portfolio, meaning we are now the largest operator onshore of oil and gas fields in the UK, was the right thing to have done. Then, being in a place where we have a significant position in shale gas was in part design, in part serendipity. There are some things you do that are smart business moves, and several of the acquisitions we've made would definitely fall into that category in my view, and then it also helps to have a little serendipity."
© Zawya BusinessPulse 2013
You can be surrounded by many advisors you trust but at the end of the day it's all about trusting your own judgment and taking the decision that you are comfortable with, says IGas Energy's CEO.Mixing effective communications, company culture and having trust in your people and your own judgment are key values that have been incorporated by the founders of IGas Energy, a leading UK onshore hydrocarbon producer. Within a span of five years Andrew Austin, CEO, IGas Energy was able to stream the company from a three-person force to over 160 employees and operational annual revenue of over GBP 80 million.
IGas which explores and develops gas and oil reserves at onshore locations in various parts of the United Kingdom started with private financing from family and friends. Although in December 2005 they concluded a joint venture with Nexen, a Canadian upstream oil and gas company, to finance some of their activities. To secure this partnership, the management team at IGas Energy ran a formal process. Austin explains: "We went out, set up a data room and invited people to come and have a look at the assets we already owned, to see whether or not they were interested in helping fund the development of those assets."
Two years later, in December 2007, IGas Energy listed on AIM to secure additional capital. "In my view, not all companies should be listed," said Austin. "But due to the growth nature of our assets, we felt that AIM would provide a market that would understand our business and would allow us to grow."
IGas Energy listed through a reverse takeover of a pre-existing company. "It may not be appropriate to all companies but to us it was particularly applicable because it minimized execution risk and meant that we could guarantee best use of our time and advisors' attention," he explained. "The only asset they had was about a million pounds in the bank. They put in the shares, we put our company in, and so we effectively had an already funded deal that covered the cost of the process."
Thinking back to the time of the listing, two things stood out for Austin as having been particularly important: communicating to stakeholders and having trusted advisors to rely on. "When you run a business that's reasonably high profile in communities, what you need is a 'social license' to operate, so you need to understand the communities in which you work, and to get your communications right. Communications to the market, to your stakeholders, to the communities in which you operate are all absolutely key. And having the right advisors in the mix, in particular the right legal advisors, really makes a difference. What stands out for me from that period of initially listing the company is that the people I trusted and worked with then, are the people I still trust and work with now."
He readily admitted, however, that finding people you can trust is not easy, and added that it was also about trusting your own judgment: "People promise lots and deliver less. You've got to trust your own judgment, but also know your own limits. Lots of people will encourage you to take on a lot in this kind of deal. It's up to you to ask the question of what you think is actually deliverable, because the next day, they've got another deal to go off and do, while you've got to continue running that business and deal with the consequences of the decisions you've made."
For Austin, the mix was patently right, and aided the transformation of IGas within a five year period from a three-person outfit to a 160-employee operation. During this transitional period, he paid particular attention to the people: "No one's going to build the company culture for you, you've got to build it yourself and be confident in your ability to carry that culture and your vision as the organization gets bigger and there are more challenges to face. This is especially true if you're acquiring businesses, because then you acquire a culture too, and you've got to make sure you can manage the integration of the companies."
Austin believes the success of IGas is due to a combination of good decisions and being in the right place at the right time. He concluded: "The extension of our business from unconventional gas into a much more rounded conventional and unconventional portfolio, meaning we are now the largest operator onshore of oil and gas fields in the UK, was the right thing to have done. Then, being in a place where we have a significant position in shale gas was in part design, in part serendipity. There are some things you do that are smart business moves, and several of the acquisitions we've made would definitely fall into that category in my view, and then it also helps to have a little serendipity."
© Zawya BusinessPulse 2013
