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Permian Producer Increases Revenue by $40,000,000 by Actively Marketing NGLs

Markets: Oil & Gas  | Solution: Midstream Negotiations/NGL Take-in-Kind  | Client: Oil & Gas Producer

Situation

An oil and gas producer engaged AEGIS to negotiate an acreage dedication for midstream services in the Permian Basin. At the point AEGIS was engaged, the proposed midstream contract did not have take-in-kind marketing rights for the producer.

 oil and gas producer engaged AEGIS to negotiate an acreage dedication for midstream services

 

Solution

AEGIS quickly engaged on the producer’s behalf to negotiate take-in-kind rights for NGLs and residue gas at the tailgate of the midstream processing plant.

 negotiate take-in-kind rights for NGLs and residue gas

 

Outcome

AEGIS ultimately marketed the NGL barrels to various bidders. Proposals came in $0.06/gallon better for Transportation and Fractionation. This uplift in pricing provided a little more than $40 million in incremental revenue to the customer over the subsequent 5-year period as volumes ramped up.

 $40 million in incremental revenue to the customer over the subsequent 5-year period as volumes ramped up.

 

 

 

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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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