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Non-Operated Producer Saves $2 Million Annually By Taking Gas In Kind

Markets: Oil & Gas | Solution: Physical Strategy & Marketing | Client: Non-Op

Situation

A large non-operated producer was marketing through the operator of the well. The operator was passing back ~$0.90/mmbtu in unused demand charges for downstream transport that was being underutilized. The non-operated producer engaged AEGIS to assess how they might reduce these charges.

 

Solution

AEGIS engaged with the operator on behalf of the non-operated producer and negotiated a take-in-kind arrangement where the non-operated producer took its gas in-kind and had AEGIS market the products on its behalf.

 AEGIS engaged with the operator on behalf of the non-operated producer and negotiated a take-in-kind arrangement

Outcome

AEGIS saved the non-operated producer nearly $1.00/mmbtu in downstream and marketing fees. In addition, the non-operated producer increased transparency into its midstream deducts and residue gas pricing. The end result was over $2,000,000 in savings per year.

 non-operated producer nearly $1.00/mmbtu in downstream and marketing fees

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This case study is not indicative of future performance or success. Commodity interest trading involves risk and, therefore, is not appropriate for all persons; failure to manage commercial risk by engaging in some form of hedging also involves risk. Past performance is not necessarily indicative of future results. There is no guarantee that hedge program objectives will be achieved. Neither this trading advisor nor any of its trading principals offer a trading program to clients, nor do they propose guiding or directing a commodity interest account for any client based on any such trading program. Hedge advisory services are performed by the registered commodity trading advisor AEGIS-CTA, LLC, a wholly-owned subsidiary of AEGIS Hedging Solutions, LLC. This case study is not required to be and has not been, filed with the Commodity Futures Trading Commission ("CFTC"). The CFTC does not pass upon the adequacy or accuracy of this commodity trading advisor disclosure. Consequently, the CFTC has not reviewed or approved this case study.
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