Small companies getting into these sorts of games hasnt been very common in Australia, explained Annells. “Certainly there are a few examples on the north west shelf but not much in the eastern states so I think there’s a lot of people who are watching what we’re doing here - trying to find hydrocarbons near people as opposed to the North West Shelf. It would be lovely to make a discovery but it would be many years before the cash flow starts.
“There’s BHP sitting out there with Minerva and 300 bcf of gas they need a market for. A pipeline is perfect for them . You’ve got Santos and Beach’s five discoveries now - back to back – down at Port Campbell – not huge but a pipeline would be very good for them also.
“Woodside and Origin have proved the prospectivity of the play with their first well – Thylacine-1 – and are following that up immediately with the Geographe well.”
Lakes Oil is Australia’s oldest listed oil company, having hit the bourse in 1946 and its genesis is an historic one. “In the 40’s there was no oil and gas in Australia. The Federal government spent one million pounds digging a shaft into the oil sands at the town of Lakes Entrance about 300 metres deep. It was 9 feet by 9 feet, concrete lined, and when they got to the bottom of the shaft they then drilled horizontally into the sand, which was probably the first horizontal drilling done ever anywhere in the world.
“They let the oil seep down into the bottom of the shaft and lifted it by bucket to the surface, then into big holding tanks which allowed oil and water settle before pumping off the oil..
“Lakes was formed and took over the running of the shaft until about 1954. Woodside, who were the main player in the onshore Gippsland at that stage, were getting ready to get Caltex interested in the area , and they needed more acreage and so took over Lakes Oil to make themselves seem more attractive for their joint venture partners.
But they never got 90% of the shares, therefore could not achieve compulsory acquisition. The company sat there as a shell of Woodside, until about 1984 when Geoff Donaldson, who shared an office with Annells at May & Mellor, was divesting some of Woodside’s dormant shell companies, which no longer were of any practical use.
The Lakes Oil file was the one that had the most promise, with only 300 shareholders holding $2 shares , and the probability that most of these were either dead or uncontactable.
“To cut a long story short, I decided to organise a takeover offer, bidding 0.6 cents a share and using a May & Mellor company called Venture Petroleum Pty Ltd as a vehicle for the bid,” he says.
“Woodside agreed. As expected there were no other acceptances and, on 5 October 1984, Venture Petroleum became the controlling interest holder in Lakes Oil Ltd.”
During the following 12 months Annells immersed himself in the business of restructuring the company so that he could apply for its re-admission to the official listing of the Australian Stock Exchange. In addition, he took time to delve into the minutes of the original board meetings to gain a feel for the company's early management.
“The old records, contained within several foolscap-sized ledgers books of the period, were handwritten with fountain pen in a clear, painstaking style,' he recalls. “During the first years Board meetings were held once a month and from a historical point of view the minutes make fascinating reading. They present a vivid picture of the days immediately after World War II when Australia was struggling to set up petroleum production of its own instead of relying on overseas imports of crude and product. The biggest surprise for me though was that Lakes Oil in 1946 was working at the frontiers of technology and, years ahead of its time, the company actually helped pioneer the art of horizontal drilling,” said Annells.
Now the Lakes Oil focus has returned to its roots in south eastern Australia.
