Business Impact Summary
United Energy Trading LLC (UET), a fully integrated gas services company, selected the Ventyx Trading and Risk Management (TRM) solution to help the company fulfill the needs of its expansive client base for expert energy marketing services. The solution allowed UET to streamline its operation and achieve significant financial ROI while scaling their national business using a single TRM system of record.
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The Company
Founded in 1984, UEC primarily engages in the acquisition and development of oil and natural gas properties and participates in the wholesale buying and selling of natural gas and electricity and related transportation and transmission services throughout the United States and Canada. UEC subsidiaries include Missouri River Royalty Corp., Rainbow Gas Co., Rainbow Energy Marketing Corp., United Energy Trading, LLC (UET), and United Energy Trading Canada.
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The Challenge
United Energy Trading LLC (UET), a subsidiary of United Energy Corporation, is a fully integrated gas services company that manages 100 percent of the company's gas operations for large and small industrial and commercial clients, as well as small municipalities in the United States and Canada. Additionally, UET maintains substantial accounts with both local and regional utilities. UET provides key services such as:
- Gas sales, purchasing, and storage
- Royalty and interest-owner disbursement
- Transport management
- Contract negotiation
- Risk management and due diligence
- Crude oil marketing
- Tax payments
- Well head balancing
- Nominations gathering and hourly balancing
UET strives to understand the needs of all customers by providing expertise pertaining to hedging requirements, deal creation, and asset management. This broad spectrum of services, as well as the company's niche in the gas market, led UET to seek an energy trading and risk management (TRM) system to fulfill the needs of their expansive client base.
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The Solution
UET selected the Ventyx Trading and Risk Management (TRM) solution due to its flexibility and unique ability to handle gas trading, as well as its strength in facilitating front-, middle-, and back-office operations in multiple geographies. UET currently has business operations in the lower 48 states and ships natural gas using more than 70 different pipelines and gathering systems.
UET uses the solution to manage the company's operations as an enterprise solution for deal capture, position management, risk analysis, credit management, scheduling, and accounting. UET has been able to take advantage of the product's fully integrated functionality, its robust FAS-133 module, and its intuitive and efficient approach to gas scheduling for greater transparency into its operations. Ventyx TRM solution's scheduling capability not only provides UET with greater transparency but also saves the company significant effort by allowing it to balance at different levels (hub, pipeline, etc.). These advantages have translated into significant cost and time savings for UET.
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The Result
One of the goals of implementing a new solution was to allow UET to scale their national business while embracing the fast-paced growth that UET was experiencing. Prior to the implementation of the Ventyx TRM solution, the system used was paid for on an MMBTU basis and was not able to support a larger trading and risk management operation. UET's goals of fast growth and opening new offices across North America dictated the need for a more robust system. As a result of implementing the Ventyx solution (in just five months), UET was able to scale the system along with its own operations and acquire a single TRM system of record.
In addition to scalability and transparency, significant financial ROI was achieved as well. Internal analysis conducted by UET estimated a potential savings for a three-year timeframe would be a minimum of $100,000 to $200,000, compared to the original system.
In summary, the implementation of the Ventyx TRM solution allowed UET to streamline its national operations and gain significant new capabilities:
- FX Risk - Ability to manage this issue at the touch of a button.
- Confirms - Ability to manage the large amount of paperwork flowing in and out of the company and be more timely, accurate, and efficient in this process. The product was instrumental in managing all new confirmations properly and accurately even with the increased volume of deals the company has seen over the last year.
- Security - The product's security features provide proper controls in place for managing the business. Only the appropriate people are able to access certain areas of the software; therefore, the data is kept robust and secure.
- Position management - Easier checking and monitoring of monthly positions for each book to reduce errors or "forgotten" trades.
- Pathing - Eliminates the need to path "receipt point sales," saving time.
- Risk Drill - Ability to "slice and dice" the information quickly and on the fly. Information that is usually kept in spreadsheets or accounting systems can be accessed easily through Monaco, such as credit info, profit & loss info, financial settlements, total volume traded, etc.
- Profit and Loss - Profit and Loss reports are generated by TRM, with more reliable data and reporting features than the normally utilized spreadsheets.
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