Talon Energy Ltd (ASX:TPD) CEO and managing director Colby Hauser understands that the world is hungry for gas.
The former high-level ice hockey player talks about his pathway into the Perth Basin’s bountiful gas fields and a prospect in Mongolia with the potential to service an insatiable China as it charts a path out of brown and black coal.
In this article:
- Pathway into the sector
- Where is the industry headed?
- Huge resource in Mongolia
- Opportunity to decarbonise
- Getting it right
Colby Hauser is originally from Canada – a country that parallels with Australia in terms of its healthy outdoor lifestyle, an abundance of natural resources and its tier-one exploration reputation.
Like many others from his neck of the woods, including his father and many others in his family, he has been working in oil and gas for the duration of his 20-plus-year career.
“Alberta is like Texas – everyone in Alberta was in oil and gas and that’s where all the good jobs were after university,” he said. “I liked it because of the blue-collar camaraderie and team aspect of it.”
Hauser’s team sports background also plays into his drive to succeed.
“I played a very high level of ice hockey back in the day and I’m drawn to competition and team achievements,” he said.
“I like the idea of taking our company somewhere with the support of my team and investors and supporting consultants and contractors. I’m very competitive I guess you could say.”
An earlier sabbatical in the form of a backpacking stint in Australia gave him an appreciation of the country, particularly Perth, and propelled a move with his wife to the resource-rich city more than a decade ago.
Once there, he picked up his MBA at the University of Western Australia, majoring in Finance.
“It’s an awesome lifestyle with lots of oil and gas jobs,” he said. “I have a commercial background and in Australia, I started consulting to some of the LNG projects and had a couple of different business development and corporate development roles.”
Hauser developed close to a decade’s experience in the Perth Basin. Before he moved to Talon to take the helm as CEO and managing director – a role he has been in for nearly a year – he was general manager, commercial, at Strike Energy.
Strike is Talon’s operating joint venture partner on the Walyering Project.
“I knew the project and the field well, and I knew the Perth Basin well,” he said. “In addition, in a prior role, I managed operations on upstream production solutions on basically every facility in the Perth Basin, so I felt I could bring a lot to the role and add value to the company and its shareholders.”
Where is the industry headed?
In relative terms, natural gas is a step up from coal, on which the region is still heavily dependent – natural gas is 66% cleaner than brown coal and 33% cleaner than black coal.
But Hauser sees the ESG imperative as being in balance with the current need for security of energy supply and a sensitive geopolitical overlay.
In his opinion, gas production in the Perth Basin is also necessary to incubate the current crop of emerging industry, particularly lithium hydroxide and other critical minerals outfits as the state transitions from its coal and its generation portfolio to renewables.
“Energy prices are getting extremely expensive everywhere else except for Western Australia where we have essentially the cheapest energy in the world – particularly when it comes to gas,” he said. “And there’s a lot of heavy industry based here that’s very dependent on gas, right?
“The Walyering project is bringing gas into production at the end of the first quarter of the coming year, so we’re helping meet gas supply shortage in the short term and proving the significant benefit of gas in the Perth Basin and what it means for Western Australia.”
Huge resource in Mongolia
Talon has recently acquired a 33% interest in the Gurvantes XXXV Coal Seam Gas Project (TMK Energy has a 66% interest) in southern Mongolia – which also aligns with the ongoing theme of energy security.
“I was in Mongolia several weeks ago doing some due diligence before we formally farmed into the project – it’s looking very promising,” Hauser said.
“We’re making that decision based on recent results pointing to a contingent resource of 1.2tcf, which is huge – it’s world-class. Talon has now acquired roughly 400 bcf, our share. The project is six times larger than the next closest contingent resource in Mongolia for an ASX-listed player.”
The Mongolian-based gas resource plays to China’s energy demand with a gas field a mere 20 kilometres from the Chinese border.
“China needs all the energy inputs so badly as it tries to move away from coal,” said Hauser. “When we were out on site, we saw thousands of coal trucks crossing the Chinese border.”
The existing pipeline infrastructure that the project would need to connect into is 300 kilometres away, which sounds like a long way by other standards. “But there’s literally nothing up there,” said Hauser. “And it could probably be built in six months, knowing how China takes on infrastructure projects.”
Talon and TMK JV have a Memorandum of Understanding with the large Chinese energy and infrastructure company – Petro China – which owns the pipeline.
The company is entering the development phase of the project lifecycle across both its flagship assets, in critical locations at a key time in history.
“The Perth basin is quite mature, there’s been gas in the Perth Basin for 50 years, so you have a mature exploration province and then a fledgling world-class exploration area in Mongolia,” said Hauser.
“Resource development is very important to Mongolia at the moment,” he said. “It’s quite an obscure country and people don’t know much about it, but there have been tens of billions of dollars channelled into it by international players like Rio Tinto (ASX:RIO) and other international listed companies.”
There is a long history of sending coal to China from the country, and although there’s no precedent for sending natural gas to China, that is only because it’s relatively new. Hauser said there was a strong broader energy precedent and a supportive government.
Opportunity to decarbonise
Mongolia has a huge opportunity to decarbonise. Much of its energy infrastructure is Soviet-era coal-fired power generation. Ulaanbaatar, the capital, has some of the worst air pollution in the world, comparable to Beijing and parts of India. But the country will need the infrastructure to move away from this past.
“I’m driven and inspired by bringing an opportunity to Mongolia,” Hauser said. “Resource development is a key to economic growth there.
“We take it for granted in Australia and Canada, where we have the cleanest air in the world. Other people just want to be able to turn their lights on, cook a meal or heat their house.
“People don’t understand energy poverty. In Ulaanbaatar, you can only turn the heat on at the end of September. There are electricity restrictions because of the coal-fired power generation and relative pollution, so there is a huge opportunity in bringing energy to people and giving them a better, cleaner lifestyle.”
As for Talon’s Perth interests, Hauser said: “The world has a huge energy demand and natural gas is still well placed for the next 25 years to play an important role in that mix.
“Australia represents some of the cheapest natural gas in the world and therefore an opportunity to create value add by manufacturing onshore – our Premier in Western Australia has been quite vocal about that.”
Getting it right
Hauser attributes his rapid success with Talon to identifying the right opportunities, finding the right JV partners to work with and picking out the right individuals to help back the story.
“Our company is only really two or three years old in its current incarnation and we’ve come out of nowhere to become involved in some really exciting projects in the Perth Basin and Mongolia,” he said.
“At Walyering to go from initial exploration success into production in a period of 18 months – it’s unheard of, right?”