Tony Brennan
Tomahawk Energy, Chairman

What were you doing before you started your present job (at Pancontinental)?
I’ve been involved in the resources industry for the last 15 years, and prior to that I was a practising Chartered Accountant. I left accounting to join Mount Edon Gold Mines in 1990, and I ran that company until we were taken over in 1997. Since 1997 I’ve been in a role of using a capital network that I’ve developed over the years to provide startup capital for lots of businesses; not only in the resource sector but I am keen on the resource sector. Right now I’m Chairman of not only Tomahawk Energy but also Gleneagle Gold, a gold explorer. So prior to this position I’ve been involved in funding of resources and other companies.

I formed Delta Capital about a year ago to formalise the work I’d been doing since 1997. What Delta does is to act as the conduit between our clients’ money and what we consider to be good deals. And it’s just grown from a small group of people to now where the last one we did I think we had about 520 people to invest in it. It’s just really grown and the success of Tomahawk will help it further probably. Where we really differ from other providers of capital is that we always stay around and help manage the business or project. We find this helps mitigate the risk for our clients.

What will be the price of oil in 12 months’ time?
Unless someone can mount an argument for falling demand or rising supply, and I haven’t heard anyone who can give you a solid reason for either of those, then I think it’s going up. I don’t think we’re going to see cheap oil anytime soon, if ever. So rather than put a number on it, what people are really more concerned about is ‘is it going up or is it going down’, and I think it’s staying where it is at worst if not going up.

What is the single most important issue facing the industry?
My experience in the oil & gas industry is limited, but I don’t think it’s any different to any other natural resources where the challenge faced is discovering and developing it fast enough to keep up with consumption such that we do not go backwards in terms of reserves. That’s the big challenge. It’s to have the capital available, the government support and required skills to discover and develop it at a rate at least equal to the rate we’re consuming it at.

What was the most significant deal/event for your company in the last 12 months?
We did an outstanding deal six months ago. When we got introduced to the project in Oklahoma we started off by having a small exposure to it. Our original exposure was for a 50% working interest in five wells. After we drilled three wells we were three discoveries from three wells, so we decided to go and renegotiate that contract to do a number of things; we more than doubled our exposure to the project in terms of acres – we went from 2000 acres to 5000 acres - and we went from 50% working interest to 100% working interest. As a consequence our share price immediately doubled and after a couple more successful wells it more than tripled. By a long way that’s the most significant transaction we did last year.

The way you find deals like Tomahawk – and I hope this mystique stays around for a long time – is a lot of people think that raising money is the hard part, and we’re lucky to have a capital network that provides us with capital.

So when people know that you have capital, the deals come to you automatically. It’s not easy, don’t get me wrong, but we make it known that we have companies with cash ready to go; and they’re not backdoor listings, they’re not any of the sort of things that other people do – these are IPOs. It’s the equivalent of when you go to a lawyer and buy a shelf company – well this is a shelf IPO. It’s got two of the three ingredients to list a company; it has at least $2million cash, it has more than 400 shareholders and all that is needed is a project. So what Delta Capital does is to put the first two legs together and then look for the project, and by virtue of having those first two legs in place, projects come to us easily. I mean none as good as Tomahawk, I have to say. By a long way it’s the best deal I’ve done for a number of years. Tomahawk was the best performing IPO in 2004, so it speaks for itself.

What will be the most significant deal/event expected for your company in the next 12 months?
From Tomahawk’s point of view, the most significant transaction will involve the imprimatur coming form a major Shale player becoming involved in our project. When some big companies start nailing their colours to projects like ours, that’s when the world will be convinced that these source rocks reservoirs are really part of the future solution to supply. Everyone has known they’ve been there forever, everyone’s known that they’re the source rock – it’s actually the completion and producing of them that’s been the hard part to crack. But while you have companies the size of Tomahawk doing them, there’s a certain number of people who are happy to sit on the side. When the bigger companies who have made a name for themselves in producing oil & gas start putting their name to our type of Shales, and I think this will happen in the next 12 months, that’s when there will be a sea-change again for Tomahawk.

Most admired person in the industry and why?
There are two actually. Paul Underwood at Tap Oil; Paul’s been a personal friend of mine for 25 years. Most people in the industry who are running $300 or $400 million companies have been recruited into the role, and I don’t know of many other people who have actually started with a plain piece of paper and built a $300 or $400 million company. Back in the old Mount Edon days we did the same thing, and it’s bloody hard work - to go from an explorer through to a several hundred million dollar producer is simply very, very hard work and it takes a certain tenacity and Paul’s got that. Paul is highly intelligent and a tremendously hard worker and he’s had great success. So I admire what Paul’s done in building something as opposed to being recruited in to be the Managing Director.

The other guy is Mario Traviati, he’s the Head - and has been for many many years - Analyst at Merrill Lynch. You just can’t help but be impressed by his industry knowledge. Because he’s been the number one analyst in Australasia for so many years it’s just hard not to be impressed by his sheer industry knowledge. So I guess that they’re the two guys I admire most in the industry.

Humour us (amusing during work-hours story/incident)
It goes back many years ago when running Mt Edon Gold Mines we were invited to New York to be part of a small Australian gold producers expo – there were about half a dozen of us presenting – and you had all the important Institutions there. I don’t know how anybody else does it, but I use memory pegs to remember people’s names and there was a particularly important fund manager there by the name of Caesar Bryant. And I thought I’ve got this guy worked out, I’ll just remember his name as Julius Caesar.

Too easy. So I do the presentation and we’re having a chat after and he comes over to talk to me, and I introduce myself and I say, “How are you Julius”? It was just like your worst nightmare, but we both had quite a laugh about it. He thought it was hilarious. It’s how memory pegs can turn on you.

How do you unwind outside of the office?
I spend a lot of time with the family. I’m married with two teenage boys. So I spend a lot of time with those guys and their associated lives which is school and sport. They’re both sporty so I spend a lot of time doing that sort of stuff. We’ve also got a little beach house up at Seabird, which no one will ever have heard of, between Moore River and Lancelin [approximately one hour north of Perth]. It’s a great little spot and we get up there just as often as we can. A lot of people drive past it but if you go in there, it’s a little sleepy crayfishing village and it’s just sensational. There are very few places around Australia where houses have been allowed to be built on the ocean side of the road but Seabird has several and we’re lucky enough to own one so there is nothing but 180 degree views of the ocean. I find that particularly relaxing. We’ve had it since the boys were very young, and since they were aged 8 & 10 they have learned to drive around the off road back tracks. It’s like been able to live in the city but show them what it was like 30 years ago when I grew up in the country. It’s also a very safe place like it was 20 or 30 years ago. It’s just wonderful. So that and I’m a mad Eagles [West Coast Eagles Australian Rules football team] supporter and go to every Eagles home game.

If you weren’t working in oil & gas, what would you be doing?
Well I kind of do it all now. I sit on the board of a number of companies. Tomahawk takes a lot more of my time than the other companies do. Even though I’m non-executive on all of them I tend to spend a lot more time with Tomahawk. So I get a good range anyway, with oil & gas business, gold, I’m on the board of a technology company. While we’re always looking at listing other businesses I have to say I’m starting to put more emphasis into oil & gas because I see that in the next 10 or 20 years this is probably the place where investors should have a reasonable part of their risk money invested. So really I get the variety everyday as it is.