Sophomore here preparing for recruiting in Houston specifically energy, I'm a finance/econ undergrad looking to break in to houston ib. I keep up with the commodities markets on wsj but I was wondering if there were any other worthwhile resources to further educate myself on the o&g industry to get a leg up when interviews come around. Appreciate the help.
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Industry Focus is a great podcast to listen to. It breaks down a specific sector each day. Easiest way to access it is via Spotify
Check out RBNenergy. They have a daily blog that will keep you in the loop and is entertaining to read.
Here's a great reference: https://www.wallstreetoasis.com/files/DEUTSCHEBANK-AGUIDETOTHEOIL%EF%BC…</a">https://www.wallstreetoasis.com/files/DEUTSCHEBANK-AGUIDETOTHEOIL%EF%BC…
Read oilprice.com everyday. Read the Weekly Petroleum Status report on Wednesdays released by the EIA. Look over the RIg count every Friday by Baker Hughes. Keep an eye on the futures curve. Read the book "Oil 101".
-If you do this on a regular basis you will start to learn the industry terminology and develop your own outlook on commodity prices.
This, especially Oil 101, fantastic read (although doesn't have much info on shale). I would also recommend listening to/reading transcripts of earnings calls for smaller companies. Particularly the smaller shale producers will have a good amount of technical jargon and granular operational detail in their earnings presentations and if you listen to enough of them you will start to get a good understanding of it all.
Other good reads that are less technical, but are really interesting would be The Prize and The Quest by Daniel Yergin and The Frackers by Gregory Zuckerman.
If your school has a ThomsonOne account (I'm not sure if all schools have this or not), I would go on there and pull down some research articles. Evercore puts out great upstream research, and CS, Wells, Barclays, and JPM put out great midstream and services materials.
I would also recommend keeping track of recent deals, knowing which basins are active, current transaction metrics and multiples (i.e. $/acre), the interplay between the different verticals (the need for natural gas takeaway capacity in the Permian, the rise of LNG export from the Gulf Coast, etc.).
What sites would you recommend to stay up to day with current transactions?
If you have any close contacts in the industry, ask them for a detailed primer (they usually dump these on the desk of interns and first years). They contain a wealth of information that would help tremendously. (They may be dated)
As someone who personally went through Houston IB recruiting coming from a target school very far away from the area, the best way for you to be prepared for technicals is to get a hold of the technical prep guides that schools like UT Austin, Rice, Texas A&M, etc. would have. You will be expected to know O&G technicals regardless of the school you attend and I am pretty sure that you will not be able to answer these technical questions even if you have kept up with oil by listening to podcasts and reading certain primers.
For example, for a first-round Jefferies Houston interview, the first technical question I got was walking the interviewer through how to get from barrels of oil to free cash flow. I knew all about going from revenue to free cash flow, but I had no idea what he was talking about. He said if you google the answer, you would easily find it but to this day, I have not been able to find the answer to that question.
While these other resources can be very beneficial in understanding the field and probably answering complicated technicals, it is essential to have those guides that these banks' target schools have.
Is the energy / oil & gas sector a bitch to understand? (Originally Posted: 08/11/2010)
OK, so I've been doing some research into the above sector and it looks pretty difficult to grasp. For those of you considering it, or - even better -, actually working in it, what are your thoughts about the learning curve and accompanying modelling that is required? On the one hand, it seems like a compelling area to tap into given the serious deal flow it is expected to generate over the coming years, however I can't help but think that it is probably the hardest to understand, given it's seemingly esoteric nature, and that it's best suited to ex-mining converts with relevant academic qualifications such as engineering etc.
Would love to hear your thoughts.
Thanks guys!
Things are as difficult as you make them. If you understand basic finance and economics you can grasp most anything in the energy markets. Devil is in the details. Supply, demand, bunk forecasts, futures prices to hedge financing, etc.
Be more specific in what you plan to model. Just IB deals or market analysis?
^^^ is correct. I just started in ER exploration and production, and yea, it is difficult to understand because you have not been exposed to it your entire life, unlike some other industries. I learn new things multiple times a day. It is all about finance (especially financing) and economics.
The modelling in the end breaks down to a DCF--today's value of future production. In detail it is much more complicated, that is the main idea.
Does anyone have any good recommendations on learning about the energy sector? Just how it works or modeling in specific?
Nice screen name.
i think this would be helpful
http://www.wallstreetprep.com/programs/self_study/oil_gas_modeling.php
That looks perfect. Unfortunately, I'm a little more interested in something that might not be quite as perfect but also not quite as expensive. Any suggestions?
I don't have any modelling advice but I recommend signing up for This Week in Petroleum and This Week in Natural Gas. I read these (I'm still a UG student for full disclosure) but I've learned a decent amount about the industry from reading these. These publications are probably more useful for traders but its my personal opinion that if you are interested in an industry you should read anything you can about that industry just to learn more about it.
Agree with LIBOR . I read daily/weekly reads as often as possible. Really helps you understand what is going on in the industry. If you can go in and start talking regulations and plays, it will most certainly help.
Also, sign up for The Gartman Letter. Best advice I've gotten on these forums.
You're kidding, right?
In the ethanol sector what are some specific multiples that banks use? I'm catching up on this sector but couldn't find the specific metrics used in trading comps. Thanks for the inputs.
Thanks for the replies gents.
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