Havoc Partners LLP (Havoc) is a natural resources investment company focused on the oil and gas, precious- and base-metals and strategic noble gases. The five founding partners of the business are geoscientists who have worked together for more than 16 years and collectively have more than 100 years of international upstream experience. Havoc was established to provide a platform to deploy the expertise and relationships of the partners in making direct and indirect investments in the natural resources sector with an emphasis on oil and gas.
The Havoc team were the founders of Fusion Oil & Gas plc (Fusion), which listed on the AIM market of the London Stock Exchange in 2000. Fusion had an extensive portfolio of interests in West Africa and was involved in several ground breaking discoveries offshore Mauritania. Following the sale of Fusion in 2003 the team moved together to establish Ophir Energy plc. Ophir grew rapidly from a start-up in 2004 to being the fifth largest deep water acreage holder in Africa by 2007. Ophir established itself as a deep water Operator in 2008 making two gas discoveries offshore Equatorial Guinea. In 2010 Ophir operated the first ever deep water drilling campaign offshore Tanzania making three significant gas discoveries. Ophir’s admission to the Official List of the London Stock Exchange in 2011 was the biggest ever E&P IPO in London and the most successful IPO for the year. Since listing in 2011 Ophir has gone on to make mutiple gas discoveries in Equatorial Guinea (>3 TcF) and Tanzania (>15 TcF).
Havoc’s investment strategy is to seek early stage exploration opportunities where investment in geoscience data and/or technology can create disproportionate increases in value. The preferred approach is to back strong management teams via investments at the corporate level in private or public companies however where appropriate Havoc may also invest directly as a working interest participant in projects. The degree to which Havoc is active within either an asset or corporate investment will depend on the scale of the investment and the circumstances however Havoc has a wealth of expertise and contacts that it can draw upon to provide technical and commercial support on an as required basis. The form of Havoc’s investment may be in the form of cash or services or a combination of both. This flexible approach enable’s Havoc to capture a wider range of opportunity than a traditional passive investment fund and allows the partnership to make best use of its skill set to create value. The Havoc partners are all geoscientists and the Company is equipped with the latest geological and geophysical software to enable the team to undertake technical and commercial evaluations and to develop and evaluate projects in-house. The partners deploy a disciplined approach to project selection which combines technical and commercial rigour with an ability, when required, to transact at the speed of thought which can create an advantage in securing attractive projects in a competitive environment. Part of Havoc’s methodology considers the liquidity of an asset, or more specifically the ability to improve the liquidity of an asset through investment in geoscience data and/or technology. The partners have demonstrated an ability to work together to build and develop asset portfolios creating value through the application of a combination of geoscience, commercial transactions, public markets and the drill bit. Havoc’s flexible investment strategy provides more optionality and flexibility to realise value from investments than a traditional E&P model. Positions may be sold, farmed down or used to create spin-off companies.
Targeting Growth Assets
It is generally understood that early stage exploration can provide enhanced rates of return for investors. It is equally understood that the risk profile associated with early stage exploration investment is significantly higher meaning that astute investment selection is critical. When there is momentum behind the market a broad portfolio approach can generate acceptable rates of return however in the absence of overall sector momentum a broad portfolio strategy will almost certainly underperform. This is where the skill set of the Havoc partners can be deployed to greatest effect in seeking to actively select those projects with higher chances of success. When capital markets are stressed, as they are now, entry price valuations can be particularly attractive due to a scarcity of risk capital. The current capital market environment is certainly challenging but this in itself should be regarded as creating a time of great opportunity to invest in good quality growth assets at reasonable prices. Notwithstanding general commodity price weakness oil and gas prices remain relatively strong and, in our view, the medium term outlook remains stable.
Access to Opportunity
Havoc’s ability to source investment opportunities comes from the experience and network of the five founding partners who have a track record of successfully building early stage natural resource companies. The partners have established a network of relationships across oil and gas companies, investment banks, governments and commerce which augment deal flow. Havoc has long-established working relationships with Merlin Partners LLP and Hannam and Partners, both of which are FSA regulated, which gives access to corporate advisory and transaction execution capability.