roc oil to focus on growth in asia pacific

Note last paragraph.

Roc Oil to focus on growth in Asia-Pacific

Matt Chambers | September 29, 2008

NEW Roc Oil chief executive Bruce Clement plans to tighten the company's focus on the Asia-Pacific region and may sell or trade off the company's producing British North Sea assets if he can secure reserves in this part of the world.

After taking the acting chief executive role after the death of respected Roc founder John Doran in June, Mr Clement was appointed last Thursday to become only the company's second chief executive in 11 years.

Mr Clement, who has been with Roc since 1997, said his first task was to complete the acquisition of Anzon Australia, which Doran helped orchestrate, and to set Roc up as operator of the Basker Manta Gummy operation off the Victorian coast now it would be the major shareholder.

After that, the focus would be on growth in the Asia-Pacific region, where Roc was already in talks with companies and governments looking for medium-sized operating partners with a good track record, Mr Clement said.

"We're not huge, we're not a multinational player and we can operate all aspects of projects from exploration to development to production, from shallow to deep water and onshore," Mr Clement said.

"We know companies and governments are looking for capable operators that are not the Chevrons and Exxons of the world, that they can work with without being dictated to.

"We know those opportunities exist because we are talking there and testing the waters."

Roc would continue to focus on expansion in Australia and China, where it already operated, as well as looking at entering countries such as Vietnam, Malaysia and Indonesia, Mr Clement said.

"We aim to use our cash flow and become an even bigger player."

If the right opportunity came up, it could signal the end of Roc's association with its minority-owned North Sea assets, Blane, which gave Roc 1835 barrels of oil daily, and Enoch, which gave 836 barrels daily.

"The North Sea assets are not core to the company but they're very valuable in that they are reserves and they are producing pretty strong cash flows in a very low-cost environment," Mr Clement said. The fields only cost a few dollars a barrel to run.

"If we're going to do anything with those, we'd want to be using them to acquire reserves, maybe more in Australia and this part of the world than in the North Sea," he said.

Roc's shares have been hit hard in the past few months, sliding more than 50 per cent since the end of May on a combination of general market malaise, disappointing drill results in Angola, falling oil prices and the loss of Doran.

There had been suggestions investors were pushing for the company to lean more towards production than exploration, Mr Clement said, but it would stay focused on both, even though it would cut some drilling spending.

In the past couple of years the company had spent quite a lot on exploration. "It will probably be a little less this year but it will still be a big part of growing the business.

"If you looked at us three years ago, we were more an exploration company but we're much more balanced now."

Roc produced about 10,000 barrels of oil daily last financial year and capacity will be boosted by another 4000 barrels, while reserves will double to up to 50 million barrels if the Anzon purchase is completed.

Production is expected to peak, on current forecasts, at up to 24,000 barrels daily in 2011 and 2012.

Roc said last Friday it had a 68.9 per cent stake in Anzon Australia and its bid, due to expire on October 6, was unconditional. A big factor in Roc's attempt to secure 100 per cent of Anzon in its scrip and cash offer will be whether Nexus Energy, which owns 19.9 per cent, accepts the deal.

Nexus has indicated it will sell into the bid, delivering Roc close to the 90 per cent needed to go to compulsory acquisition. That would leave Nexus and Roc owning about 10 per cent of each other, setting the stage for a swap with a small cash adjustment