Harold Pedersen’s claim to fame is in taking Jordan Petroleum from a $65,000 investment and selling the company 10 years later for $435 million.

Shares of Jordan, issued at 10 cents, were worth $9.80 when the company was sold four years ago, representing one of the great success stories in the oilpatch. But Pedersen is not one to rest on his laurels.

The dynamic, no-nonsense oil executive is working some of the same magic with his latest venture, three-year-old upstart KeyWest Energy, which trades in the $4 range on the Toronto Stock Exchange.

“Zero to 3,000 barrels a day in 18 months,” gushes the president in reference to KeyWest’s rapid growth.

“It has taken us three years to get to 3,000 (including the 18 months it took to get to the production stage) barrels a day. With Jordan, it took six years to reach this production level. So we’re 50 per cent ahead of Jordan’s pace.”

To drive his point home, Pedersen, 55, buries a visitor with press releases, financial statements, clippings and maps before chatting about his journey from small-town Saskatchewan.

1. What initially sparked your interest in the oilpatch?

“The opportunity to make money.”

2. Your fondest memories from a boyhood on a farm at Kerrobert?

“That was so far back, it’d be hokey to talk about. I left there at 17. There weren’t too many opportunities. We were in a drought period when I left.”

3. What was your first work experience after the farm?

“I worked in about 30 or 35 branches of the Royal Bank in Saskatchewan. I travelled as a relief accountant and as a relief manager for them. After completing school at the University of Saskatchewan, I went to work for Texaco (Canada) in Regina as an oil scout and as a lease man. Then I progressed through a variety of companies and positions until 1980, when I went into Inverness Petroleum as executive vice-president.”

4. Who were the people who had the greatest impact on your life?

“I would say two or three people in the oil and gas business. Gee, I don’t know if I want to be so kind as to mention their names (laughter). But also the staff I’ve had over the years have been great influences.”

5. What can you say about the staff of KeyWest?

“I think it is without question the very strongest technical team we have ever put together. Mary Blue (executive vice-president) has been a partner of mine for 20 years. Our other partner, Garry West, is semi-retired but he’s been with us 20 years. He works for us on a part-time, consulting basis.”

6. What’s the key to building a winning team?

“Actually, I call them the dream team. We have three young vice-presidents in their mid-30s. They work extremely hard. They’re very professional. They have strong, strong work ethics. And they have the strongest technical capability of any management group we’ve ever assembled. Some day, if we sell KeyWest, they will be the genesis of the next company we build.”

7. From your experience, what’s the secret to getting the most out of your staff?

“Lead by example. We have a team approach with an excellent complement of job skills.”

8. Has your management style changed over the years?

“Not a lot. We’ve always been demanding. We’ve always had one objective running public companies and that’s to make money for the shareholders.

“Making money for the shareholders is the creed you have to live by if you’re running public companies. You have to do the very, very best you can for the shareholders. As a consequence, we have shareholders that have been with us through all three of our companies.”

9. Are you as keen as ever?

“I’m probably keener because we have learned to do some things better. You need a number of skills to make a company work. You need money-raising skills, you need administrative skills, you need complementary technical skills.”

10. So how’s business?

“We’re staffed to run a company of probably 4,000 barrels a day or better. Directionally, where we’re headed over the next 12 to 15 months is a company with 4,000 to 4,500 barrels equivalent per day. There’s a lot of value here. The market’s not reflecting it, but we’ve been around long enough to know that ultimately intrinsic value is recognized.”

11. What’s the best advice you could offer someone about to start up a company in the oilpatch?

“Well, work hard, raise a lot of money and find a mentor who has previously run a public company. You’ve got to be able to raise money. This is a very capital-intensive business.”

12. Of which accomplishment are you most proud?

“We had a good run at Jordan Petroleum. I was proud of that. I’m prouder of this, prouder of the team and prouder of the results. With every company, we’ve learned to do things better and faster.”

13. Reflecting on your career, would you change anything?

“You learn from your various experiences. In this company, we have the advantage of melding our mutual skills and money-raising efforts and the results have been very positive.”

14. What are your interests away from work?

“My main interest is work. I have a phone line and a fax line to the office whenever I’m on holidays. I relax easier now than I used to. I play a little bit of golf, but not much. Only holiday golf. Some water sports at Lake Windermere where we have a place. Oh yeah, plus I do mountain snowmobiling. I used to do a lot of dirt biking.”

15. Is there a celebrity you’d pay $10,000 to have lunch with?

“You’ve got to be kidding!”

16. Anything that annoys you in the world?

“Probably the Canadian political system. With the exception of Alberta, high taxes in Canada. Lack of an overall healthy business climate.”

17. How has technology impacted your business?

“Number one, there have been major advances in geophysics. Two, drilling technology has improved. Three, we’re in a computer world and the information retrieval systems are fantastic. Geologists and engineers are 200 to 300 per cent more efficient today than they were 10 years ago because of the information they can retrieve.”

18. How many more companies will you be launching?

“We’re probably good for another two or three. We have a long ways to get through the alphabet. We’ve had an I (Invermere), a J (Jordan), we’re a K so the next one will be an L. I’m enthusiastic because of the team. They work with one objective in mind, which is to make money for the shareholders. I think if you look around at some of the companies that have been in business for a long time, you’ll see they haven’t done too much for their shareholders.”

19. What do you see in your life’s crystal ball?

“I think we’re going to see a pretty good run in the oil and gas business in the next year or two. This business tends to be very cyclical and the OPEC-ers (Organization of Petroleum Exporting Countries) are not exactly the strongest cartel in the world. They tend to be a little leaky.”

20. What is your projection for oil and gas prices?

“I think we’re going to be surprised on the upside by oil and gas prices. I think they’ll maintain their current levels for at least the next year. Investors have not believed the price of oil and we in the industry have not believed it either. I suspect this will be the best year ever for the oil and gas industry.”

THE COMPANY: KeyWest Energy

* BRASS: Harold Pedersen, president; Mary Blue, executive vice-president; Carrie McLauchlin, vice-president of finance/CFO.
* PROFILE: KeyWest achieved production of 3,000 barrels of oil equivalent per day by the end of 2000, which is 72 per cent oil, with wells in Chin Coulee in southern Alberta, Carbon in central Alberta and Merid in western Saskatchewan. The company forecasts 2001 cash flow of $26.5 million (.55 cents per share) and net earnings of $10 million (.21 per share).
* RECENT STOCK PRICE (KWE-TSE): $1.47 (year range, .90-1.70).
* WEB SITE: www.keywestenergy.com
* ADDRESS: #1200-520 5th Ave. S.W., T2P 3R7.
* PHONE/FAX: 261-2766, 234-9637.

IN PROFILE: Harold Pedersen

* BORN/RAISED/AGE: Kerrobert, Sask., 55.
* TITLE: President, KeyWest Energy.
* EDUCATION: Bachelor of Commerce degree, University of Saskatchewan (1968).
* RESUME: Vice-president, Forest Oil Corp. (1973-80), president/CEO, Inverness Petroleum (1980-86); president/CEO, Jordan Petroleum (1986-97); launched KeyWest (1998).
* CLAIM TO FAME: Sold Jordan Petroleum in 1997 for $435 million ($9.80 a share), 10 years after starting the company with $65,000.
* PASSIONS: Water sports, mountain snowmobiling.