Hedging advisory of the year: Aegis Energy Risk

Energy Risk Awards 2017: Strength in capabilities drives business to Texan advisory

Laura Popiel Photography

“Through a historic downturn in the oil and gas industry, which led to a massive budget tightening, we have continued to grow,” says Patrick McCrann, director of business development at advisory firm Aegis Energy Risk, a hedge advisory firm for oil and gas producers.

Formed in 2013 by chief executive Chris Croom and president Justin McCrann, the Woodlands, Texas-based company has helped producers respond to troubling times.

“The downturn in the industry caused many capital providers, such as banks and private equity firms, to implement minimum hedge requirements,” Patrick McCrann says. “It is important that our industry sector be available to help these producers implement hedge programmes to meet their long-term goals.”

For Aegis, the result of these trends means that in 2016 the company grew its client base substantially, opened a regional office in Denver, Colorado, and acquired its largest client — an unnamed US natural gas producer, said to be among the top five in the country.

“We believe this to be one of the largest companies to ever hire a hedge adviser,” McCrann says.

As evidence of the firm’s insight, McCrann claims the company accurately called the bottom in natural gas prices in March 2016, forecasting that lower production of gas and higher price-driven demand later in the summer would support prices. In February 2016, it also predicted a rally in the crude oil market and, in May, it forecast the subsequent congestion of oil prices.

The client growth set off an expansion in Aegis’s capabilities, McCrann says, in turn spurring growth and the opening of the new office. “Denver is a market we feel is seeing a strong increase in start-up exploration and production companies, and we are proud to have established a presence there in 2016 to meet this growing need,” he says.