Removing Risk is Core to our Mission

There are a myriad of ways to keep your capital safe. At Pytheas Energy we follow a tried and true method for every deal that has kept our clients satisfied

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Pytheas’ Proven Process

Each energy deal undergoes rigorous due diligence, including technical, financial, legal, and environmental assessments. We work with internal and 3rd party experts to thoroughly evaluate the viability of the project and identify potential risks.

We negotiate robust contracts with suppliers, partners, and customers to ensure a clear and equitable distribution of risks and responsibilities. These contracts also include provisions for dispute resolution and exit strategies.

When appropriate, we invest in insurance policies to protect against unforeseen events, such as natural disasters, equipment failure, or project delays. These policies can help transfer certain risks to insurers.

Continuous monitoring of project performance is essential. We use real-time data analytics and performance benchmarks to detect issues early and take corrective actions, reducing potential losses.

Creating various scenarios for different market conditions and risk events allows us to proactively plan for contingencies. This might involve stress testing financial models or developing alternative strategies to cope with adverse conditions.

Developing clear exit strategies for each investment allows us to limit potential losses and maximize returns. This might involve selling assets, renegotiating contracts, or finding alternative uses for the energy infrastructure.

What it means for you

By implementing these strategies, our aim is to minimize risks, ensure a more stable financial performance, and create a resilient portfolio capable of adapting to changing market conditions and regulatory environments.

This approach would ultimately enhance the sustainability and profitability of our investments while protecting the interests of our stakeholders.

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risk factor #1

Origination risk

Establishing fair market value (FMV) – and negotiating favorable deal terms – is a critical skill set our team possesses.

What’s the secret to getting high quality assets at – or below – FMV? Generally speaking, you need three things:

Proprietary Deal Flow:

Are you getting access to these deals at all? And are you getting access to them before there is significant competition?

Motivated Seller: 

Is the seller willing to negotiate in good faith for a reasonable price?

Brand Power: 

Does the buyer have the ability to negotiate preferable terms based on the strength of their reputation?

risk factor #2

Underwriting Risk

With countless potential acquisitions available, underwriting and due diligence would be overwhelmingly costly without machine learning (ML) and artificial intelligence (AI).

Our proprietary AI/ML models give us a significant advantage over other potential buyers by simply moving faster.

Primary Focus:

Finding the ~1,000 well packages that are too big for small operators, and too small for large operators

Initial Goal:

Deal with the deferred maintenance issues, expand the wells by drilling more laterals, utilizing new techniques, and possibly purchasing nearby parcels.

Due Diligence and Underwriting:

Using AI, we can do initial diligence in minutes and hours, instead of weeks and months.

risk factor #3

Operational Risk

As a general consideration, all O&G operators have to deal with known operating expenses related to water remediation, energy costs to run the machines, and labor.

Technological innovation is the key to unlocking the profit potential hidden inside the growing inventory of marginal wells.

Downtime Is The Largest Cost:

When wells aren’t operating, it not only costs money to repair, but you’ve lost money in the meantime. 

Maximizing Profits:

From solar-powered pumps, to using AI for optimizing production, we can maximize net profits per barrel produced.

Technology Is Key:

When you’ve got proper sensors in the well, you can use data to determine when the best times of day are to pump – and for how long you can pump – based on the ground pressure and electricity costs.