Two questions for the NRG guys out there:
1-What are some resources to prepare for an SA interview at Energy groups in Houston?
2-Where in the Energy sector would you invest right now? What are your favorite themes and where do you see value?
Thanks :)
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Enbridge and Spectra is pretty much the only boost to the industry at the moment.
Bump-Anything else?
Petroleum Engineer:
To be honest I would stay out of the market. It could drop to $40 again or go up to 50/60. Short to mid term (6 mo-3 years) is highly questionable.
Unless you have a lot of capital to invest for a long time (5+ years). In that case, I would try to get investment into a growing oil company (Small to mid size such as Extraction) or oil and gas fund.
The other option is pipeline MLPs for medium to long term growth. Those are always stablish plays however I am not too educated on them.
@sophtrading123" energy interviews are different depending on the firm, your level of experience in energy, and other factors. You'll be asked and must know the basics such as DCF, financial statements, valuation methods, energy industry and deal-specific knowledge is also helpful from what I've been told.
Also be prepared for questions related to say debt and maybe even restructuring since this is a "hot" area in energy.
As for opportunities to invest in I'd say oilfield services, specifically those that can provide a technological edge (i.e. using nanotechnology and fiber optics to beam info from the well to the BOP stack and all the way up and use big data to analyze and anticipate problems).
Take my advice for part 1 of your post with a grain of salt as I'm not a banker and have never been through that interview process, but I'll try to provide more industry-specific advice to balance that out.
So part 1) Given the breadth and complexity of the O&G market, I'm always interested to see if a candidate can speak somewhat knowledgeably about the industry on a broader scope. I would find some primers and familiarize yourself with the different verticals within the space and figure out some key macro drivers that affect the pricing of the commodities (think OPEC, USD, etc.). Aside from this I'd prep for it like other banking interviews. Might be good to find out what the firm has a tilt towards (OFS, MLPs, restructuring, ECM etc.) and focus on that.
For part 2) This has a plethora of answers and it will change slightly from person to person as macro views are slightly different person to person, not to mention is very nuanced from a "value" standpoint given "value" is relative especially within this space. Upstream is by far the best place to invest currently. Whether you believe WTI is heading back sub-$40 or going to rip past $60, there are ways to make money on both sides in the Upstream vertical. I would look more to the Smid cap universe, but this also depends on where you believe WTI is heading and which parts of the world are going to drive it there. If you believe NAM can't be tamed then from an OFS perspective I'd look to HAL and maybe some Smid land drillers levered to the Permian. From an E&P stand point, take your pick. Everyone is fighting to obtain Permian acreage and paying good sized premiums for it. You can go Lg. and Smid Cap with names like PXD, CXO, CPE. There are plenty of other ways to play this simple thesis and there are plenty of other themes and ideas for the O&G space in general. You just need to find something you can speak to with conviction.
Hope this helps give you some direction.
Thanks a ton
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