Direct Swap Use Case: Oil & Gas
Hedging Solutions for the Oil and Gas Industry
Combined with partner systems, Direct Swap provides an efficient end-to-end workflow with straight-through processing for an oil and gas exploration and production company.
The small treasury team at an oil and gas exploration and production firm had difficulty managing their bilateral hedging processes and efficiently conducting price discovery. After discussions with Direct Swap, they learned they could leverage our API to their existing systems to achieve straight-through processing and efficiently perform price discovery for OTC swaps.
- The company plans to use their existing CTRM system to understand risks and exposures, and model customized instruments to achieve hedge accounting treatment and eliminate basis risk.
- Leveraging our API, the company will then send the terms to Direct Swap, where the counterparties can be selected and price discovery commenced. Each pricing request opens negotiations with multiple counterparties on price and other terms, and our marketplace structure ensures a competitive process.
- From multiple concurrent negotiations within Direct Swap, the company can then select the most favorable terms, eSign standard documentation and have both sent back to their CTRM via API for downstream processing.
Our combined solution provides process efficiency, reduced error rates, and a competitive pricing process. This solution lets the company’s small treasury team spend more time on their core responsibilities and less time managing their hedging program.