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Appalachian Producer Services Corporation (“APSC”)
currently manages risk, supply purchases, pricing options,
credit requirements and hedging strategies for 3 small LDC’s
in the Appalachian Basin. APSC also manages the same factors
for 3 natural gas marketers, 2 unregulated pipelines and 27
producers. APSC has a staff of 5 people who have a combined
98 years of experience in Appalachian production, marketing,
supply, pipeline issues, and who have experience as employees
of LDC’s and the management of LDC supply needs.
APSC is trading gas for hours every day, and would like
to share this exposure and intelligence, to the benefit of
your LDC.
RISK
- APSC manages risk portfolios via use of
live NYMEX screens, live basis accounts and futures accounts.
APSC tracks daily fluctuations in the cash market @ DEOG,
COH, TCO, DTI, TETCO, CKY, Somerset, Wiser, Equitable, and
Tennessee Gas by virtue of utilizing the Intercontinental
Exchange (ICE).
- APSC utilizes financial reports and 4 separate daily publications
to determine the daily and long term trends in futures pricing
and cash prices. We do this by analyzing storage, technical
trend factors, FT contracts, rig counts, weather trends, commitment
to trader’s reports, and industrial manufacturing statistics.
In addition, we are in the market trading each day, so we
have a good handle on the trends in the market by virtue of
live trades and fresh market intelligence.
- Evaluation of Credit; this is the dominant issue
in our business right now and we continue to monitor this
very closely. We are very aware of the effect that credit
has on your business.
SUPPLY
- APSC purchases daily supply and long term supply as
agent for the entities listed above based on the
needs and requirements of each client. APSC will sit
down with you, analyze your potential supply needs, and structure
a program to buy supply that fits your load profile and economic
requirements.
- In most cases, APSC can buy supply for your LDC with no
pre-pay terms, under normal credit terms, and within certain
parameters. Your LDC will need to furnish audited financials
to APSC prior to the initial purchase and provide quarterly
updates thereafter.
PRICING
- APSC buys your daily, monthly and seasonal cash gas purchase
needs on the pipes listed above. APSC watches prices throughout
the day, the week, and the month, and decides when it is the
best time to buy supply with your input.
- APSC charges a nominal fee per dth for any spot purchases
or one time purchases, and a lesser amount for one time purchases
over 30,000 dth/month. APSC charges on a nominal “per-dth”
basis to purchase and manage any capacity requirements you
may have.
MISCELLANEOUS
- Hedging strategies: APSC provides market intelligence
and options concerning strategies to hedge and can set up
the options/futures accounts if you wish. APSC can execute
triggers and will watch to make sure the execution is done
properly.
- Pool management: APSC can operate the pools on
each pipeline to move volumes in and out of the pools and
can arbitrage values at each point. APSC would charge an additional
fee if you’re LDC agreed to utilize this service.
- Capacity: APSC can evaluate, purchase and manage
capacity on each pipe
We believe that LDC’s benefit by utilizing APSC, gain
market intelligence, and enhance management and control over
gas supply and price fluctuations--- which allows you and
your staff more time to expand and enhance your core business.
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