Latest from the AFR: New Drillsearch boss needs to get across...

Latest from the AFR:

New Drillsearch boss needs to get across merger Lingo

• by
• Sarah Thompson
• Anthony Macdonald
• Jake Mitchell

Drillsearch's new chief executive Walter Simpson has an elephant in the room to deal with from day one.
It appears inevitable the company will merge with Beach Energy eventually but neither side has fired a shot (publicly at least).
Street Talk understands Simpson's predecessor Brad Lingo was keen to pursue a deal with Beach, seeing logic in combining the two Cooper Basin-focused oil and gas companies.
But if Lingo was working on advancing a deal, that all came to a halt with his shock departure in July.

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Upon announcing Lingo's exit, Drillsearch also unveiled a new strategy to focus on regional opportunities.
This would be at odds with boosting the company's exposure to the Cooper via a Beach merger.
"Our Cooper Basin business is well developed, and we continue to work hard at this," Drillsearch chairman Jim McKerlie said at the time.
"However we must actively look at the future and make sure we continue to deliver growth to our shareholders."


He said Simpson had a proven track record of project delivery in "multiple jurisdictions", and was therefore better suited to guide the company's regional growth ambitions.
So now McKerlie and Simpson are in the United States briefing investors about the new strategy.
Kerry Stokes' Seven Group owns 19.9 per cent of Beach and Drillsearch, adding to the buzz around a potential merger.
Seven chief executive Ryan Stokes said last month the logic to combining the two companies had become even more compelling due to the oil price plunge.

But Beach has also been linked to Santos' Cooper Basin assets, which are on the block as part of a company-wide asset sale bonanza.
Beach would appear a logical owner of the assets and its acting CEO and chief operating officer Neil Gibbins has previously worked for Santo, focusing on the Cooper.
There is a mixture of international strategic buyers and private equity players also looking at the Santos Cooper Basin assets.
As revealed by Street Talk, Drillsearch has drafted in advisers UBS and Goldman Sachs, while Beach has Macquarie Capital and Flagstaff Partners in its corner.