Industry Trailblazers: From Greek tragedy
to triumph
Energean's Prinos assets
Mathios Rigas isn’t afraid of a stacked deck.
He doesn’t flinch when the odds are so glaringly against him even the dealer thinks he
should cut his losses and run.
Mathios Rigas isn’t afraid of a stacked deck, because he once took that bet and lived
to tell the tale.
In 2007, the industry entrepreneur was approached to takeover a firm.
This was the hopeful company’s pitch.
It had a negative EBITDA of €30million.
It owed the Greek government €80million.
Its daily production barely reached 800 barrels and its exploration licences were due
to expire in just three months.
Finally, all of the firm’s assets were located in Greece, a country with very little space
on the international oil and gas stage.
“It was a disaster waiting to happen,” Mathios said.
“There were 400 people that were going to lose their jobs and that would have created
a very serious situation in Kavala.”
Mathios, a native Greek, soon agreed to the takeover, acquiring all of Eurotech shares
from Regal Petroleum, 66.6% of Kavala Oil’s common shares and 95% of Kavala Oil’s
preference shares.
He pumped €180million into the once failing firm, now known as Energean Oil and
Gas, and built a much more persuasive pitch.
The firm now averages more than 2,000 barrels a day, has a 25 year production licence
and boasts an infrastructure capable of supporting a total capacity of 30,000 barrels a
day.
“The proposition was a huge bet, but I believed in the assets and saw the potential to
produce more oil. I saw it as a unique opportunity,” Mathios said.
One of chief executive’s first big purchases was to acquire four jack-up rigs to leverage
possible returns.
For Mathios, the Prinos basin’s total potential includes 30 million barrels of proven and
probable reserves. The big ticket number tallies up to $1billion, according to an
independent evaluation he quoted.
And he wasn’t the only expert to see an emerging spark in Greece’s offshore potential.
Mathios soon struck a six-year off-take agreement with BP to secure the firm’s cash
flow.
“It is an attractive investment,” the company leader said.
“The EU is a stable environment. Exploration in other areas including North Africa and
Iraq is suffering because the politics are volatile and unpredictable.
“It’s very rare to find production in such shallow waters and in a place as nice as
Greece.”
The company is now deploying a $225million investment plan in a bid to increase the
Aegean Sea’s Prinos basin production to 10,000 barrels a day by the end of next year.
The plan includes 15 new wells, two additional unmanned platforms and extending the
basin’s field life for an additional 15 years.
While the Prinos basin has been operating since the 1970s, Greece’s hydrocarbon
potential traces back to 480 BC when ancient Greek historian Herodotus is credited
with saying: “It is good to know that I personally have seen the tar they refer to on the
lake and the waters of Zakynthos island.”
Energean is now exploring that same area the historian described.
Mathios added: “We are seeing the same oil seeds that Herodotus saw at the time.”
The Athens-based firm also has its sights set on exploration in Israel, Egypt and
Croatia.
But for Mathios, it will always boil down to his home country.
It’s his hope that if Energean posts the kind of returns he thinks it’s capable of, it can
play a pivotal role in writing the country’s financial wrongs.
He said: “In 15 years time I hope our children will be in a country that will suffer a lot
less than we have in the past four years.
“My hope is that Energean will continue to develop and help Greece get out of its
financial crisis.
“This industry could prove to be a very important revenue generator for the Greek
people and there are very few industries that can play the same role in moving the
government away from the challenges it faces.”
The industry leader knows his stacked game isn’t quite over – there’s still everything
to play for.
“It’s extremely satisfying to see the company grow from what was practically nothing
in 2007 to what it is today, but we still have to wait for the discovery that will put Greece
on the map,” he said.
“For me words don’t mean anything until people invest their own money. We’ve
invested more than $200million. Simply put, we believe in this and we’re putting our
money behind it.”
He added: “Looking back it was a huge challenge. Now seven years later it’s been
worth every moment and penny we’ve invested.”
https://www.energyvoice.com/special‐features‐2/71917/industry‐trailblazers‐greek‐tragedy‐
triumph/