Gusella, the 66-year-old former head of Sceptre Resources, had several business setbacks in the past decade (remember when oil was selling at $10 a barrel?). “I had to start over again when I was 58 years old,” he says.
In 2001 he and a few partners bought a shell company and then raised $1 million from investors. Today Connacher is an integrated oil producer with interests in conventional crude, natural gas, oil-sands production and refining – at a time when most of the industry is specializing in “pure plays” (just one form of production). “We are where we are consciously as opposed to sheer serendipity,” says Gusella. “Our attitude was to bring an oilfield approach to the oilsands instead of the megaproject mentality.”
Connacher's big break came when its technical team identified some promising properties being sold by the Crown near Fort McMurray. In January 2004, while most people were still recovering from Christmas, Connacher acquired 98,000 acres for $1.3 million. Just one site on that property, dubbed Pod One, is now known to contain enough bitumen to produce 10,000 barrels of oil a day – for 25 years.
Oilsands production requires lots of natural gas, so Gusella acquired a gas producer. Then he bought a 10,000-barrel-a-day heavy-oil refinery in Montana. As a result, he’s achieved true balance – if gas prices rise, he’s protected. If bitumen-refining capacity shrinks, he’s still okay.
Pod One began commercial production last December. By June, quarterly revenues had leapt to $200 million – and a second processing plant is in the works. As one analyst told Alberta Venture magazine, “You can't argue with results.”
We Easterners tend not to know a lot about the oil business, but it’s as dynamic and creative as any industry. For never giving up, for buying low, and for cracking the top 100 by defying conventional wisdom, Canadian Entrepreneur is proud to select Dick Gusella as its Entrepreneur of the Week.
(For more info on Connacher, click here.)