Surviving the Downturn…with Jerry Chessell
In December 2015, Jerry Chessell, Managing Director of Two Seas Oil & Gas Ltd. presented a talk on the topic of ‘Surviving the Downturn’ hosted at the PESGB Offices in Croydon…
Jerry opened his talk with a slide from the 2014 PESGB Salary Survey indicating that a higher percentage (40%) of jobs in our Industry are found primarily through personal referral than any other method. This illustrates the importance of having a strong network of contacts (PESGB membership etc.)
He showed a timeline of his own career (including 4 lay-offs!) against a backdrop of the oil price over time as a full cycle example. Historically the oil price and job prospects always recover after downturns. Jerry was out of work for 18 months in 1986/7 (back filling as a landscape gardener) before gradually picking up contract work. Most of his jobs came through personal referral.
Jerry then discussed the generalities of setting up a “Promote” company and used Two Seas as a specific case study. There is a spectrum of business models that have succeeded in this niche. This one was low on financial investment but the founders retained control.
Pros: Low cost and risk, direct control, potentially high reward (Reach sold out for ~£30mm).
Cons: No guaranteed income, no guaranteed payday at the end, hard work.
Some Lessons Learnt
- Experience, ideas and contacts can be more important than funding
- Contracting in non-G&G support can be efficient and cost effective (mate’s rates)
- Don’t dilute too early (maintain control and protect value)
- Corporate structure – plan for success (multiple entities?)
- Full time commitment essential (“stay up all night to get lucky!”)
- Keep feeding the “hopper”
- Prioritise partnering for “Traditional” bids if possible
- Stay commercially aware
- Focus efforts on closing any deal in good time (heads up from the workstation before the Licence expires!)