A rising tide of oil prices is raising Larry Rigdon's boats. Houston-based Rigdon Marine operates vessels that tote supplies to the offshore rigs of clients such as BP (NYSE:BP), Exxon Mobil (NYSE:XOM), and Shell. When designing his fleet, the founder staked out new standards for safety and fuel efficiency. But it's the universal hunger for energy that has produced gushers of growth.
My father owned a small radio and television store in Kirksville, the Missouri town where I grew up. My mother worked in a dress shop her entire life. She's 82 and still works there. I was the first person in my extended family to graduate from college. I got my accounting degree in 1970 and passed the CPA exam the first time.
I quit accounting in 1976 and joined a small public company that built and operated towboats and barges on the Mississippi. We were bought by a company that provided supply vessels for offshore drilling. I lived for years in places like Egypt, Mexico, and Southeast Asia. I did everything from digging ditches and laying sewer pipe to operations. I also started several businesses for my employer, including two for transporting containers on barges and one for docking Navy ships in San Diego Harbor. Post- Exxon Valdez, I helped create a service for escorting oil tankers in and out of Prince William Sound.
In 1992, the company was acquired by Tidewater (NYSE:TDW), among the world's largest marine-services corporations. As executive vice president, I ran operations in the United States, the Middle East, the former Soviet Union, and Southeast Asia. In 2002, I was passed over for the CEO position, so I retired. That lasted six weeks.
At Tidewater, I observed a quite literal sea change in the oil and natural gas industries. In the '90s, offshore drilling moved from shallow to deep water, raising the cost of developing an oil or gas field from $20 million to hundreds of millions. Consequently, if something goes wrong, and a supply vessel accidentally strikes a drilling rig, the cost in damage and lost time can be as high as $500 million. And crew can get hurt -- even killed.
I designed a boat with redundant systems so that if something fails, the craft won't roll out of position and hit the installation. The boat also runs on diesel electric, which has saved our customers as much as 20 percent on fuel. My plan was to build a fleet of 10 and operate them for oil companies.
The shipyard delivered our first 10 boats in May 2004; we refinanced and ordered 10 more. Traditionally, shipyards acquire all parts and materials. But the demand for these vessels is so high that the pipeline for major components is packed. So when I recently decided to order four more boats, I bought all the major components myself, before I had signed a contract with a single oil company. The risk of not getting parts is greater than the risk of not finding use for the boats.
In June, I sold Rigdon Marine to a public marine-services company called GulfMark Offshore (NYSE:GLF) for $283 million. I have retired again, though I own stock and have a seat on the board. The acquisition gives us capital to build larger, more specialized boats. And our employees, all of whom have equity, are keeping their jobs. That matters more to me than the money.