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Analyzing Counterparty
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A Practical Approach
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Utilizing Technology to
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	Allegro Recognized as a Leader in IDC MarketScape 2011 Assessment of ETRM Software Providers

	Dragana Pilipovic Joins Allegro Development as Director of Quantitative Analytics

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January 30-31, 2012
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February 2-3, 2012
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Australasian Oil & Gas Exhibition & Conference
February 22-24, 2012
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Supporting Material

Case Study

A global exploration and production company faced several business challenges, including the fact that multiple systems, methods and processes were used across the enterprise for managing marketing activities as well as risk management initiatives. While some of the company’s processes were automated, others were manual or required spreadsheets, which resulted in business inefficiencies including dual data entry. Managing contracts and credit across all groups also created a significant challenge.

With Allegro’s ability to support a full range of business processes across the enterprise, the company can now capture contract detail for multi-commodity deals, view position keeping, manage scheduling of energy resources, and automate settlement and invoicing. Allegro’s flexible reporting allows company managers to generate a wealth of new internal reports, including sales margin reports. Processes that previously took an inordinate amount of time and resources, such as invoicing, are now entirely automated. Allegro also provides the functionality necessary to manage the company’s equity production, giving them more accurate insight into inventories available for sale.

Petroleum E&P ETRM Solutions

Allegro ETRM Solutions for Petroleum Allegro gives upstream customers the industry’s broadest spectrum of advanced solutions for users throughout the organization, including land managers, drilling supervisors, production managers, trading and risk managers, and accounting, auditing and compliance staff. Our robust solutions help users track drilling/production operations and equipment inventories, administer leases, forecast volumes, reconcile production with revenues and accurately allocate income to interest holders. Allegro also supports contract management, ensures regulatory compliance, and manages price, volatility, credit and other market risks.

Allegro’s comprehensive upstream solutions provide uniquely valuable tools across the exploration and production business process.

Allegro’s Property Management component provides E&P companies with the ability to set up and maintain all property data. This allows for proper division of marketing arrangements, analysis of entire production forecasts, and gives accurate levels of marketable product.
Allegro’s Equity Production component assists in the automation of marketing of oil and gas production by allowing for the management of volumetric forecasts, nominations, balancing, measurement, and variance analysis across all production assets, taking into account marketing arrangements at the lease level.
Allegro’s Revenue component allows for revenue receipts to be allocated and ultimately distributed to interest owners, prepares revenue disbursements, and supports regulatory reporting.

Optimal Software Components for Petroleum E&P

Trade Execution - Provides tools to efficiently capture and confirm physical and financial trades for commodities.
Trade Strategy - Provides the ability to define trading strategies, which can be made up of existing positions and hypothetical positions, to allow for analysis of different trading scenarios while setting operational goals and limits.

Positions 8.0 - Provides comprehensive risk position reporting and viewing capabilities. This component allows reporting on Mark to Market, exposure, limit management, and profit and loss across the entire portfolio.
Optimization 8.0 - Calculates the incremental valuation of all possible dispositions of long and short commodity positions, based on market prices, transportation, storage, and processing information.
Simulation - Provides a set of tools to help analyze the impact to exposure and profit and loss resulting from movements in the market.
Credit 8.1 - Delivers advanced credit monitoring, analysis, scoring and rating, and overall counterparty credit management to accurately measure current and future exposure along with using robust credit risk models to accurately rate counterparty credit scores in a timely manner.

Equity Production 8.1 - Assists in managing the marketing of oil and gas production, including balancing, nominations, measurement and variance analysis. With visibility from the property straight through to scheduling, companies can quickly generate production positions taking into account all right-to-market interest owner quantities.
Pipeline 8.1 - Manages scheduling, nomination, transportation and actualization for commodities transported via pipeline, including NGLs, crude oil and refined products. Provides the ability to create and store pre-defined pipeline routes and plans with associated information such as product, carrier, and origin and destination locations, along with the ability to automate the creation of shipments per the predefined plans.
Petroleum Blending 8.1 - Delivers comprehensive functionality for managing the blending of petroleum liquids including defining blending plans, developing run-out schedules and tank inventories, and providing the ability to blend heavy crude oil to lighter densities to meet pipeline carrier maximum density standards.
Vessel - Manages the scheduling, shipment and actualization of single or multiple commodities that are transported via vessel.
Barge - Manages the complexities of scheduling, shipment and actualization for any single or multiple commodities that are transported via barge.
Truck 8.0 - Manages scheduling, nomination, transportation and actualization activities for commodities shipped via truck.
Rail 8.0 - Manages scheduling, nomination, transportation and actualization activities for commodities shipped via rail, including liquid natural gas (LNG), coal, natural gas liquids (NGLs), crude oil and refined products.

Contracts 8.0 - Captures and manages all contract information across the enterprise and through the entire contract management life-cycle.
Settlement 8.0 - Provides the tools that settle and feed data to invoice physical, financial and other transactions associated with commodity transactions and logistical movements.
Net Valuation 8.0 - Enables the valuation of inventory along with the ability to complete net forward, net back, and profit margin calculations across commodities, including commodity value, transactional, and transportation costs.
Price 8.0 - Provides flexible tools to capture, create, and access pricing data and forward curves for all commodities, including coal, natural gas, electric power, crude, refined products and natural gas liquids (NGLs).
Currency 8.0 - Provides the solution to enable management of multiple currencies including the ability to capture currency exchange rates and currency trading.
Hedge 8.1 - Assists with hedge accounting and fair value disclosure requirements by providing robust tools for analysis and reporting such as Financial Instrument Management, Currency Management, Interest Rate Management, Fair Value Management, Fair Value Option Management and Disclosure Management.
Revenue 8.0 - Allows for revenue receipts to be allocated and ultimately distributed to interest owners, prepares revenue disbursements and supports regulatory reporting.
Property 8.1 - Streamlines management of property data, division orders, interest owners, conveyances and production forecasts for oil and natural gas production.
Emissions 8.1 - A dedicated component providing efficient, and manageable yet comprehensive capability to accommodate trade activity for either renewable energy credits or emissions certificates. This functionality is unique to the market, in that it not only supports current market conditions but allows customers to be ahead of the curve as mandates by various global requirements change.

Workflow - Alert-based workflow engine that automates business processes through task and approval tools and automated control management, as well as having the ability to seamlessly integrate with third-party software and database systems.
Price Connect 8.1 - Provides a standard interface to market prices from different data providers. This is a one way import of data from the market provider to Allegro to be used for pricing data.
Exchange Connect - Provides a standard interface to electronic trading exchanges to allow the submission and receipt of bid and offer data while allowing for execution and confirmation of transactions through the exchange. The interface is bilateral allowing for straight through processing of transactions from and to the exchange directly from the Allegro environment.

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Optimal Software Components for Petroleum E&P