"I didn't see this coming at all," Kieran Chiverton told Energy News after announcing his shareholders had agreed to have Ozcon placed in voluntary liquidation amid ongoing efforts to sell the company.

 

He started the company with his wife Rhiannon in 2005.

 

Though the oil price plummeting in the latter half of 2014 hit Ozcon like a ton of bricks, Chiverton restructured the company and was picking up more work when a few late jobs and late funds caused cash flow issues and he had to make the painful decision to wind up the company.

 

Ozcon worked on projects for Santos, Origin Energy and BG Group/Shell linked to Queensland's three LNG megaprojects.

 

Chiverton maintains positive relationships with all three operators, while in the coal space his end-user clients included BHP Billiton, Whitehaven Coal, Peabody Energy and Anglo American.

 

"It wasn't a result of the CSG companies doing anything wrong by us, it's just that a few projects didn't work out the way they needed to, to be profitable," he told Energy News.

 

"Drilling in Australia has turned around. Our workbook suggests that as we've been booked out for months, particularly in our casing division which is the core of our business.

 

"Unfortunately we had a division that does specialised welding which ran some losses in November and December.

 

"We were booked out months in advance with casing orders, and we've had a few projects run late as well and have just run out of cash to fund that work, and had to wind the company up as a result."

 

That was the case across the coal and mining sectors, he said.

 

Yet the specialised welding division which was heavily involved in CSG was what really hammered Ozcon.

 

"We've definitely seen a massive transition in our business from predominantly CSG work to predominantly mining-related, so coal, copper-lead-zinc, with amazing support for our IP [intellectual property]," Chiverton said.

 

"To pull yourself out of a downturn you need cash, and we got to the point where the funds we were waiting for haven't been coming in time to be able to fund the business opportunities in front of us."

 

 

Chiverton said it all happened for Ozcon in the space of two months, when the oil price slump coincided with the metals downturn, leaving the company with nothing to fall back on.

 

"What really hurt us was that work slowed down in all divisions at the same time, after some large investments into the business to handle the growth we were having at the time," he said.

 

He encouraged the shareholders to vote to wind the company up and go straight into liquidation so his creditors, who he always prided himself on looking after, would get the best return for the assets.

 

"We felt that was the best way to also ensure our employees could move into other opportunities as quickly as possible," he said.

 

"In saying that, the liquidators are working very hard to get the best possible return for creditors and there are several interested parties in buying the business and continuing operations."

 

 

While the liquidation is not good news for the current shareholders, Chiverton says it's not over yet.

 

As a company that is integral to the drilling sector he hopes to find someone to fund the business adequately.

 

"Hopefully getting a buyer quickly can attract more of a premium on our assets because whoever buys it up will be able to monetise that quicker," he said.

 

"I'm gutted about all the hard work we've put in it since my wife and I started the business; we've worked very hard.

 

"Up until very recently we've seen a positive result for everyone where we could improve, but with the last few blows we just couldn't sustain it."

 

He's still passionate about the business and wants to continue on if someone else sees value in the company.

 

"I would be happy to see it continue under new ownership. I designed most of our IP, and I would like to continue with them," he said. 

 

"I love working with all our clients, and it would be a very exciting opportunity to continue with it and fund it better than what I've been able to.

 

"What we provide is in high demand, and will continue to be, particularly as commodity prices recover.

 

"Cash flow is what killed us."