ScottMadden Analyzes Natural Gas LDCs Financial Performance to Identify Strategic Opportunities in a Static Market

November 12, 2015

Shifting Strategic Direction to Create Value for Companies with Natural Gas Assets

ScottMadden, Inc., one of North America’s leading energy consulting firms, recently published, “The Value of Strategic Direction: Strategic Analyses Across Natural Gas LDCs.” This report can help utilities with natural gas assets assess strategic direction.  It provides in-depth analysis comparing a panel of ten leading natural gas distribution companies on strategic focus, return on equity, and shareholder return.

When it comes to managing your natural gas distribution business, there are a wide range of strategies to employ to improve shareholder value creation.  For this analysis, these strategies are grouped in three categories:

  • Conventional – Traditional dividend play with a focus on the fundamental Local Gas Distribution Company (LDC) business
  • Horizontal Integration – Growth via acquisition of additional LDC businesses, gas trading and/or field service businesses
  • Vertical Integration – Growth via midstream (pipelines, storage, etc.) asset acquisition/investment and, in some instances, upstream extension into gathering and drilling

This report profiles the differing risks and rewards of each category, and the value of selecting and executing the right one.

Robert Shively, partner at ScottMadden, shares, “Having worked as an executive within a growth-oriented LDC, I was surprised by two findings in this study: First, the strategies among LDCs are much more divergent than we expected.  Second, the differences in shareholder value creation and business results across the three strategy categories are quite surprising.”

Mr. Shively continues, “Although there is quite a bit of variability in results among companies with similar strategies, the correlation between strategy and results was fundamentally strong.  We believe this will be of considerable value for executives with natural gas distribution assets.”

Our extensive experience in strategy development has helped us assist utility companies in discovering the right way to evaluate, select, and implement new strategies. For more information on accessing a detailed analysis for your company, please contact us.

About ScottMadden’s Energy Practice
We know energy from the ground up. Since 1983, we have been energy consultants. We have served more than 300 clients, including 20 of the top 20 energy utilities. We have performed more than 2,400 projects across every energy utility business unit and every function. We have helped our clients develop strategies, improve operations, reorganize companies, and implement initiatives. Our broad and deep energy utility expertise is not theoretical—it is experience based.

About ScottMadden, Inc.
ScottMadden is the management consulting firm that does what it takes to get it done right. Our practice areas include Energy, Clean Tech & Sustainability, Corporate & Shared Services, and Grid Transformation. We deliver a broad array of consulting services ranging from strategic planning through implementation across many industries, business units, and functions. To learn more, visit www.scottmadden.com | Twitter | Facebook | LinkedIn

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Media contact:
Mary Tew
marytew@scottmadden.com
919-714-7628

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