Oil Producer Saves $1.8 Million Through Smarter Energy Procurement

The opportunity

A natural resources energy company sought to reduce operating costs and increase net operating income across its onshore producing wells.

Electric utility-related expenses represented approximately 40% of the client’s total operating costs, making energy procurement a significant opportunity for savings. Tradition Energy worked with the client to evaluate its existing strategy and identify ways to better manage electricity costs across its producing properties.

Although the client had a centralized energy strategy in place, it had previously been advised to purchase a 5 MW block energy product that resulted in overbuying power. Tradition identified an opportunity to better align energy purchases with actual demand, helping reduce unnecessary costs and improve the operating economics of each well.

Tradition analyzed this client’s current block energy strategy by looking at their historical hourly load settlement data and determined they were “over hedged” by about 1.5 MW annually.

Comparing the risk exposure and lost dollars on their current product vs. a fixed energy product helped Tradition’s experts illustrate to the client precisely what problems to address. With recommendations from Tradition, the client flipped to a fixed energy product for the remaining six months of their contract terms.

Tradition simultaneously negotiated a new contract in the forward market for a longer term fixed energy product.

The Result:
Delivering Substantial Cost Savings

Immediate Savings

Tradition assisted the oil producer in negotiating a fixed delivery product for the remaining six months of the client’s previous contract, which delivered a savings of $140,000.

Long-Term Results

After executing a new contract using Tradition’s recommendations, the client realized over 37% in savings totaling $1.8 million over 24 months.

Ongoing Partnership

Tradition continues to work closely with this client’s accounting and field operators to make sure adding more wells is a seamless process as exploration and acquisitions increase.

Client Testimonials

The individuals we deal with at Tradition are extremely responsive and helpful anytime we have questions or issues!

Chief Executive Officer,
Energy Organization

Tradition Energy has helped us in many ways with their knowledge, expertise, research and service by identifying products that fit our business and enhance our cash flow, such as Demand Response.

Vice President,
Oil & Gas Producer

The individuals we deal with at Tradition are extremely responsive and helpful anytime we have questions or issues!

Chief Executive Officer,
Energy Organization

Tradition Energy has helped us in many ways with their knowledge, expertise, research and service by identifying products that fit our business and enhance our cash flow, such as Demand Response.

Vice President,
Oil & Gas Producer

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For decades, organizations have trusted Tradition Energy to navigate increasingly complex energy markets. As the nation’s largest independent energy procurement and sustainability solutions advisor, we bring clients resources, market reach, and transaction activity other advisors cannot replicate.

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Oil Producer Saves $1.8 Million Through Smarter Energy Procurement

The opportunity

A natural resources energy company sought to reduce operating costs and increase net operating income across its onshore producing wells.

Analysis

The Result:
Delivering Substantial Cost Savings

Immediate Savings

Long-Term Results

Ongoing Partnership

Client Testimonials

The Scale and Experience Behind Every Recommendation

Case Studies

Proven Results in Oil & Gas

Oil & Gas Operator Avoids Nearly $1.3 Million in Electricity Costs

Natural Gas Operator Generates $120,000+ Through Demand Response

Reducing Energy Costs and Risk for Oil & Gas Operations