THE CONFERENCE CALLER: It seems some ASX-listed junior hydrocarbon players with North American projects are – like the rest of the world – a little polarised when it comes to controversial US President Donald Trump. By Mark Fraser
During the recent RIU Good Oil Conference in Perth, Trump was both highly praised and slightly berated by separate presenters with onshore assets.
Coming to the Republican president’s defence was Eon NRG’s Jerry McGann, whose company is currently focusing on its Powder River Basin play in Wyoming, where earlier this year it picked up some “juicy acreage” involving land which had been “tied up with government ownership effectively for sometimes 30, 40 or more years”.
“You might have various views as you sit down there about president Trump and some of the things he does, but one of the things that he has done is mobilise some of his government agencies, and one of those is the Bureau of Land Management – the BLM,” he said.
“And they had tens of thousands, probably hundreds of thousands, of acres that were tied up – sometimes for 30 or 40 years … and this was just fallow ground that was never available for hydrocarbon exploration.
“Trump has really got those chaps off their chairs, and ladies, and they had a lease sale here last July in the Powder River. This particular sale in the Powder River raised US$220 million.
“And what happens in these lease sales – it’s a lot of fun.
“A new lease package comes up every eight minutes, you bid online, and we have basically two technical guys in the office in Denver, and they are competing with big groups – sometimes 20 or 30 people – in other places on their computers bidding against us.”
McGann told RIU delegates under the terms of the Powder River deal Eon ERG had ended up paying just US$12/acre, was required to pay a 12.5 per cent royalty, and now held the land for 10 years with “no obligation for drilling or anything else”.
During the closing moments of his presentation, however, Samson Oil & Gas chief executive Terry Barr wasn’t so complimentary of the US president, suggesting Trump had to take some of the blame for the oil price’s volatility while commenting on his company’s hedge book.
Samson currently has an 87 per cent operated average working interest in the Foreman Butte project in North Dakota.
“Our hedges, and I guess this is an unfortunate part of the oil business, everyone likes to have a high oil price,” Barr said.
“But basically, our lender wanted to be hedged, and so our hedge book is currently valued at $2.7 million.
“It goes up and down, obviously, with the oil price every day – it was, I think, $2.1 million yesterday, so it’s all over the place.
“And I’ve never seen volatility like we have experienced … it’s quite disheartening, I think, to see (when) our beloved president comes out with some statement and the price goes down five dollars, and he comes out with another one and it goes up five dollars.
“So, it’s fairly hard to predict that in your planning.”