Aug. 14, 2002 — Kiodex Inc., a technology company that provides a Web-services platform for corporate risk management and financial reporting, recently announced that five energy companies have joined the customer base for the Kiodex Risk WorkbenchSM.
Cinergy Corporation Encore Acquisition Company, Enserco Energy, Florida Power and Light Energy Power Marketing, and Halron Oil Company, have all subscribed to this flagship risk management service.
“These new customers are particularly significant for us,” said R. Martin Chavez, Kiodex CEO. “Given that the energy companies themselves entrust management of their energy price risk to the Kiodex Risk WorkbenchSM, any company can feel confident using our services to develop a significant competitive advantage by implementing efficient hedging strategies.”
The Kiodex Risk WorkbenchSM is the only risk management platform that integrates complete deal capture, proprietary valuation models, transparent risk reports, and independent market data. This combined functionality gives corporations a comprehensive business process for managing energy price risk.
The five new Kiodex Risk WorkbenchSM customers represent a broad cross-section of the energy industry:
* Cinergy Corporation is a Fortune 500 company that has a balanced, integrated portfolio comprising two core businesses: energy merchant and regulated operations. Its “into Cinergy” power-trading hub is the most liquid trading hub in the nation
* Encore Acquisition Company is a growing independent energy company engaged in the acquisition, development, and exploitation of North American crude oil and natural gas reserves
* Enserco Energy, Inc. is the unregulated marketing subsidiary of Black Hills Corporation; it markets natural gas, electricity, and energy solutions throughout the western United States
* Florida Power and Light Energy Power Marketing, Inc. is the power marketing subsidiary of FPL, one of the largest and fastest-growing electric utilities in the United States
* Halron Oil is one of the largest independent petroleum marketers in Wisconsin and in Michigan’s Upper Peninsula
The range of hedging experience in these companies varies — from limited to extensive. “This variety is important to Kiodex as well,” added Chavez. “It was always our goal to build a platform that can be fully utilized by the most experienced hedging departments, but also is useful to those companies that, for reasons of cost, implementation time, or experience, previously lacked access to these robust tools. We want to make the Risk Workbench useful and accessible to every level of corporation.”
Different companies were attracted to different features of the Kiodex Risk WorkbenchSM. A core element that appealed to both Cinergy Corporation and Florida Power and Light Energy Power Marketing is that Kiodex includes independent market data in the Risk Workbench subscription. An independent source of market data is essential to a corporation’s need to mark their derivatives trades to current market prices.
“Access to an objective, verified source of market data is an invaluable resource to an energy company,” said Tom Wiles, General Manager of Corporate Risk Management for Cinergy. “Not only was Kiodex able to provide us with a majority of the market data we need, but also they provided the information completely cleansed, and in the format that we required.”
Jonny Brumley, Executive Vice President of Business Development at Encore Acquisition Company, appreciated the valuation models of the Risk Workbench. “Kiodex allows us to measure the effectiveness of alternative hedging strategies in a variety of commodity price scenarios,” said Brumley. “It’s also important to be able to price our hedges for an approximation before going to our counterparties.”
Several companies mentioned the speed of implementation of the Risk Workbench as a valuable asset. Because the Risk Workbench is a Web service, implementation time for customers is typically less than one week. “One of the requirements in our selection process was fast implementation,” said Russ Cohen, Vice President of Risk Management for Enserco Energy, Inc. “But we also needed the robust functionality typical of enterprise energy risk management software systems. The Risk Workbench platform was able to meet both of these essential requirements.”
People interested in learning more about the Kiodex Risk WorkbenchSM can visit Kiodex’s website at www.kiodex.com.
Kiodex Inc. delivers a Web-services platform that transforms risk into a strategic advantage. Corporations use Kiodex services to measure commodity price risk, to design optimal hedging strategies, to reduce hedging costs, and to comply with best accounting practices.
Corporations that subscribe to the Kiodex platform can minimize the impact of volatile commodity prices on their earnings.