|
 Nobody can quite recall the precise dollar value of the offer but it was small potatoes by today's standards - $1 million or $2 million, tops. A joint venture partner had been nosing around, asking about the availability of Canadian Occidental Petroleum's stake in some unexploited and obscure heavy-oil assets in northern Alberta.
During a late-afternoon strategy session, Canadian Oxy's senior brains seemed disinclined to look a gift horse in the mouth and opted to grab the easy money and run.
Then the chief operating officer lifted an eyebrow and casually tossed out a challenge: "Wait, how much is this really worth?" Charlie Fischer queried his colleagues.
None of the brass could put a value on the bitumen leases and Fischer confessed he was in the dark as well. Almost as an afterthought, he mused: "Well, we'd better find out. Because they're either worth nothing... or they're worth billions."
Eight years later, market analysts and senior executives at Nexen Inc., Canadian Oxy's successor company, tend to agree that it's more likely the latter. In the end, of course, the leases weren't sold. Instead, they became seed assets for a corporate bitumen inventory which ultimately led Nexen to the $3.5-billion oilsands project, jointly owned with Opti Canada, known as Long Lake.
It's a story told by Roger Thomas, Nexen's chief of Canadian operations, by way of illustrating the presence of mind and down-home horse sense that's routinely demonstrated by his boss, chief executive Charles Wayne Fischer, Alberta Venture's 2005 Business Person of the Year.
Thomas cites the episode as evidence of Fischer's ability to bring concrete value to a position he's held for almost five years and which reportedly pays him $847,917 annually, not including stock options and various bonuses which approached $1.5 million in 2004.
Underpaid? Based on Nexen's breathtaking 2005 win streak, it's possible.
Nonetheless, it was a year of living splendidly for a grounded kid from southwest Calgary (by way of Saskatoon, his birthplace) who never doubted - or never admits to doubting - that his company's long-range strategic plans would eventually bear fruit. Not even when Nexen's share price descended into the energy sector underworld - sub-$20 - just two years ago, against a backdrop of falling revenues and reserve writedowns.
"No, I didn't become a genius overnight," Fischer shakes his head, perched high on his six-foot, three-inch frame, letting a laugh slip from beneath the flecks of grey on his trademark handlebar moustache.
"I think we had a strategy and we really stuck to it."
And when the plan started to jell, markets responded in a big way. In fact, ravenous investors went on a buying binge that almost tripled the company's share price, albeit temporarily.
Why? Because, suddenly, reasons for optimism were piling up like clothing on a teenager's bedroom floor. At their prescient best, markets anticipate economic events six months to two years in advance. This year's buyers of Nexen stock were newly inspired by the expected success of the Long Lake steam extraction process to come on stream in late 2006, leading to synthetic crude oil production in 2007. They were intrigued by Nexen's timely purchase of North Sea fields, believed to contain 1.2 billion barrels of oil, from EnCana Corp. for $2.6 billion. They were delighted by a scheme to transform the company's lucrative chemical division into an income trust, Canexus Income Fund, which made its debut on the Toronto Stock Exchange in August. They were gratified by improved operating results in far-flung properties from Yemen to the Gulf Coast.
Let's see, what else? While ramping up not-yet-operational megaprojects, Canada's fourth-largest independent oil and gas producer managed to triple its profits in the third quarter of '05, largely by shedding a variety of "mature" assets, mostly conventional oil and gas properties in western Canada. Meanwhile, chief financial officer Marvin Romanow was anticipating cash flow of $2.4 billion by year's end.
In short, the fiscal news was good, better, best throughout 2005. Equally significantly, it was a year in which Fischer, his inner circle of corporate courtiers and every one of Nexen's 3,200 employees found a dozen different ways to feel good about themselves and the work they do.
After taking a long look, Alberta Venture's panel of expert judges found plenty of the same reasons. Among them:
| • |
Nexen's long-term strategic vision seemed amply vindicated during a 12-month period which Fischer may eventually come to regard as his personal miracle year, highlighted by many developments already mentioned. Not content to stand pat, meanwhile, the company remained bullish on other unconventional resources, announcing among others a $4-million commercial coalbed methane project. |
| • |
Frequently applauded for transparency and ethical business practices, Nexen received an important award from the Canadian Coalition for Good Governance, a national association composed of 45 wealthy and influential institutional investors. |
| • |
Taking its lead from the man at the top, Nexen reinforced its reputation as one of the country's most supportive workplaces, cracking Maclean's magazine's list of Canada's best 100 employers. |
| • |
Community initiatives remained a key corporate priority. Most recently, Fischer accepted the Southern Alberta Institute of Technology President Partnership Award for 2005 in honour of a SAIT-Nexen partnership which goes back at least 15 years. It was a point of immense personal pride for Fischer, a trained engineer and master of business administration from the University of Calgary who, along with his wife, Joanne Cuthbertson, has championed numerous education-related causes. (A highlight of that evening in early November was a heartfelt thank-you speech by Rafat Al Akhali, one of 70 Yemeni students to attend SAIT and the University of Calgary on Nexen-financed scholarships, to the benefactor he fondly called "Mr. Charlie" - this on a night when less fortunate Arab youth were setting fire to the banlieues of France.) |
| • |
Not least, the judges took note of the tireless Fischer's personal record of volunteerism, including his ongoing stint as co-chair of Alberta Climate Change Central, which serves to underscore Nexen's principled stance on environmental responsibility. Another example, among many: as co-chair (with Ann McCaig of Calgary) of the capital campaign for the new Alberta Children's Hospital, Fischer spearheaded a $50-million-plus fundraising effort. |
But if Fischer and Nexen feel on top of the world today, there were doubters as recently as mid-2004. With global oil profits streaking into accelerated lift-off mode, Nexen was Krazy-Glued to the launch pad. Production seemed to be locked into predictably dull patterns and, to the external observer, there wasn't much on the horizon.
"In some ways, people wondered whether or not (Nexen) was hitting the wall or missing their cues," agrees Calgary-based Wilf Gobert, vice-chair of Peters & Co. and one of the canniest oil and gas analysts on the street.
But if Gobert was among those fooled, it wasn't for long.
"A couple of building blocks that were put together prior to 2005 have not yet physically paid dividends," he adds, pointing to Long Lake and the Buzzard property in the North Sea, both aiming for production in 2007. "But it's now apparent that they are going to be big winners for the company when they begin producing."
And no, even when Nexen appeared to be eating the competition's dust, Gobert stresses, he never overheard the slightest whisper that Fischer might take the fall: "No, I didn't. Charlie has a great reputation. That's why he landed the CEO's job in the first place."
Adds Roger Thomas, the Nexen Canada chief who started with Canadian Oxy 16 years B.C. (Before Charlie): "I don't think we ever felt the company was tanking at all. But we certainly felt the need to show (shareholders) more consistent production growth."
In Fischer's view, it was all about refusing to lose faith in a well-conceived game plan. His prescription: patience, patience and patience.
"We have traditionally been a very selective buyer of assets. You just keep turning over stones, keep looking for the right opportunity," explains Fischer, 55.
"We're involved in most of the major basins, including the Gulf of Mexico, West Africa, the Middle East and the North Sea," he starts running down the list. "But when you're working in foreign jurisdictions or you're investing in deep water or non-traditional assets like oilsands, you're dealing in long-cycle time projects."
Fischer describes Nexen's recent growth curve as "a little lumpy," unlike the old days in western Canada, when explorers could drill a well and start producing within a year.
"So when you're in a flat spot, you might hear comments that you're underperforming. But right now we have a better growth profile than virtually any of our competitors."
As the subject of one of the most rounded CVs in the Canadian energy business, Fischer brings a fascinating box of tools to the boardroom table. One colleague theorizes that his first and last love was working as a facilities engineer and, whether or not that's true, Fischer does believe getting his nails dirty in the field helped him to lay solid groundwork for an executive career.
After starting out building gas plants and compressor stations, he moved into planning and domestic operations (drilling wells), eventually getting his feet wet in financials, transactions and international operations. His last job before joining Canadian Occidental as senior vice-president of exploration and production for North America in 1994 was running Encor Inc., the upstream oil and gas subsidiary of TransCanada Pipelines.
A self-described technology bug, Fischer's interest and expertise allows him to get next to his people in the field, something he tries to do frequently. Particularly keen on deep-water drilling techniques, he has the know-how to ask the right questions and generally picks up a few fresh insights of his own.
"You hear the phrase 'setting the tone from the top' so much, it's kind of a cliche," testifies John McWilliams, Nexen senior vice-president and general counsel. "But it's really true here. Charlie is very connected with everything you need to know to run an oil business."
He also enjoys access to three secret weapons, a triad of mentors whose collective fund of knowledge and wisdom runs deeper than the North Sea.
"I worked for some great champions, great guys to know, including Gerry Maier and Dick Haskayne at Hudson Bay Oil & Gas. I worked for Gerry again at Bow Valley Industries, where I met Doc Seaman," says Fischer, who continues to call on these grey eminences when the big decisions keep him awake nights. "Sometimes it's just nice to get another view."
And should you ask him to identify a dominant shared characteristic exemplified by each of these three wise men, Fischer's response is instantaneous. "It's integrity," he answers. "There was never a question of their values so you always know the advice you're getting is as good as it could be. They set an outstanding example."
Colleagues and competitors agree Fischer has learned to carry the same ball. Meanwhile, the Nexen boss credits Haskayne for leading him a merry chase in terms of volunteer and charitable efforts.
"Haskayne has probably made me work harder in the community than anybody," Fischer grins. "I tell him, 'Dick, it's tough to keep up with you.' When you have mentors setting such great examples, why wouldn't you give something back?"
Fischer's commitment to a great cause, such as the Alberta Children's Hospital, comes from the gut. Nor does it sound the slightest bit corny when he says: "We have a simple philosophy in our family: you leave things better than you find them."
Ask Fischer what he reads in his spare time and he rolls his eyes. Spare time is an unattainable abstract, an alien concept. The list of agencies and causes for which he toils up to 15 hours weekly is staggering, beyond those already mentioned: Hull Child & Family Services, the Calgary Olympic Development Association, the McMahon Stadium Society, the U of C Faculty of Medicine Dean's Advisory Council and on and on and on.
At the corporate level, Nexen remains an important funder of the arts, as well as a faithful supporter of breakthrough research programs such as the U of C's Institute for Sustainable Energy, Environment and Economy (ISEEE).
"Another thing I think we do very well is communicate with communities that are affected by our presence," Fischer says, warming to the subject.
"So we've got a sour gas plant sitting up on a corner of the city. We work hard to make sure people understand the safety precautions we take, what our plans are. It doesn't matter whether we're in Canada, Yemen or Nigeria," he continues.
By doing so, Nexen has been able to deflect potential backlash from local communities, even prompting one interested party to ask Fischer, "Why don't you guys teach the rest of the industry how to consult with communities? You do it really well."
Fischer's view of the practice is largely pragmatic. He believes it's just plain good business, a strategy that gives Nexen an immeasurable competitive advantage.
Tall and solidly built, Fischer turns toward a visitor with a frank, friendly face that seems utterly devoid of guile.
"For me, it's an easy concept. Do the right thing for the right reasons," he concludes with a shrug.
"If you sat down and asked yourself what's right and what's wrong, I don't think it'd be hard to decide.
"And the rest of it's just noise."
|
