BARNABY Egerton-Warburton is a Kalgoorlie boy who went on to spend 15 years working around the world for several big finance names (including JPMorgan) but recently he's been doing a great deal of homework on the subject of gas in Europe and the US.
He now runs micro-cap Future Corp Australia (FUT) -- last traded at 0.07c -- and has just pulled together a deal that he hopes will set the company on a bright energy future. Future (formerly listed as Telco Australia) is to earn 70 per cent in a coal-seam gas project in France owned by European Gas (EGL).
EGL simply doesn't have the money to pursue all its European CSG projects. The deal also includes FUT having the option to farm into other EGL projects in France and Italy. EGL will also be given a 10 per cent stake in its new partner.
Egerton-Warburton knows the Gardanne project, near Marseilles, is no world-beater, and tiny by comparison with what he could pick up in Queensland and northern NSW. But there's a gas pipeline passing within 6km that supplies an alumina refinery, which means that Gardanne could be selling gas once it gets one or two wells producing. It could cost around $40m to get Gardanne into production, a fraction of the capital needed here, mainly because long pipelines would be involved. FUT has looked at gas prices in Europe; they are low at the moment due to the recent hot summer, but Egerton-Warburton believes those prices are at the bottom of the cycle. Even if only a third of Gardanne's gas can be converted from resource to reserves, that would allow a thick slice of profit.
He's now looking at a gas play in the US. Again, low costs are the rationale. He says that not only do you get pipelines in existence, but also experts are cheaper. In Queensland it would cost him $2000 a day to have a geologist consultant on site against around $400 in the US.
FUT Price at posting:
0.8¢ Sentiment: Buy Disclosure: Held
