When it comes to wealth creation, entrepreneur Paul Fudge could well be the biggest winner we are likely to see during this downturn.
Fudge earned around $660 million yesterday when Origin Energy purchased an exploration permit from his company Pangaea.
The exploration permit is located in the sweet spot of Queensland’s coal-seam gas region, an area called Undulla Nose. Origin Energy has built a portfolio of coal-seam gas assets in the region, and grabbing Fudge’s permit gives it a dominant position in Australia’s emerging coal-seam gas sector.
Fudge literally has a rags-to-riches story. While details about his background are a little sketchy, Fugde is a self-described “fabric jobber” who traded fabric in Asia before a friend suggested he take a look at the coal-seam gas sector.
On the face of it, it would be easy dismiss Fudge as being exceptionally lucky were it not for two factors.
First, Fudge didn’t simply pick bits of ground to explore and hope for the best. He built his company around a team of Australian and North American experts and poured millions of dollars into his exploration efforts (including $70 million from the sale of another permit to Origin in 2006).
Second, Fudge had the vision to get into coal-seam gas at a time when the industry was considered extremely risky and even unproven – it is really only in the last three or four years that big energy companies have embraced the potential of coal-seam gas.
Origin chief Grant King acknowledged this yesterday when he described Fudge as being “quite visionary in the way [he has] taken quite large acreage positions on what was then a highly risky possibility”.
Fudge is a lesson in the rewards that can come from perseverance and vision.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
