Hi all, I'm an incoming IB analyst at a BB in a natural resources division and was wondering if I should be worried at all about the recent tanking of oil prices and if the industry slow down will affect my job security. I was talking with another analyst and he thinks not, but Im looking for some outside opinions. Should I be concerned with what's going on in the energy industry right now?
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No, you'll be fine.
Should you be concerned in terms of understanding what is going on? I would think so. Should you be concerned about losing your job? Well, what do lower prices mean for people with excess capital and for people too highly leveraged and how does that influence your future job?
I'm in the same situation as you, so take that for what is it worth.
This is a good question. Can people in Houston shed some light on this? What is the general perception in Houston on ibanking job security given the recent decline in crude oil prices? Have any banks started signalling layoffs or cuts to bonuses? Any insight would be helpful.
Not sure what this will do for bonuses, layoffs etc., but the founder of one of the most prestigious energy boutiques says it will actually help M&A transaction volume. http://www.bloomberg.com/video/oil-drop-bobby-tudor-on-energy-m-a-crude…
I guess you can infer it may actually be a good time to be joining a Houston IB team
would not worry at all as an analyst. worst case scenario deal flow is down (particularly OFS). you will not get laid off. No one is firing analysts. Bonuses for analysts are fairly standardized at the BBs. If shit hits the fan, maybe the guys who tend to pay above street (boutiques) fall closer to or at street. but participating in the ups is also why you go to a boutique. And "ups" at the analyst level we're talking the price of a Corolla.
good to hear bobby tudor's opinion. the dallas fed estimated texas could lose 128,000 jobs in the first half of 2015, so i couldnt help but be a bit concerned (obviously such a loss would be heavily concentrated within actual energy firms).
I can't post links, but check fuelfix for an article today titled "The calm before an M&A storm" that basically echoed tutor's comments.
would appreciate any color some of the more experienced energy IB folks here have to add.
A number of PE funds have paid high prices for energy assets and some of those deal will suffer a lot during the downturn. Investment bankers will be needed for debt restructures and assets sales. Maybe not all the bankers, though.
It will be an interesting time, as downturns in a sector often are, because you get to shift from selling upside pipedreams to confronting situations where things have gone wrong. Seeing how things have got wrong can give you excellent experience for working out how to downside-proof deals in future.
Restructuring guys do this a lot. Restructuring is one area I'd like to work in.
the people that need to worry about losing jobs because of oil prices are the incoming new petroleum engineers or younger current engineers. With drilling and production going down and with potential mergers and acquisitions, they have a lot more to worry about then we do.
Probably not. The falling oil prices mean a lot of companies are in trouble given how much high debt many of them have raised. That means there's going to be a lot of consolidation as larger and/or financial healthier companies buy weaker ones on the cheap. So expect a lot more M&A but a lot less capital markets work (probably a good thing).
If oil prices stay low for a long time then HOU IB is in trouble. Most people don't think that's the case though,
Probably not. The falling oil prices mean a lot of companies are in trouble given how much high debt many of them have raised. That means there's going to be a lot of consolidation as larger and/or financial healthier companies buy weaker ones on the cheap. So expect a lot more M&A but a lot less capital markets work (probably a good thing).
If oil prices stay low for a long time then HOU IB is in trouble. Most people don't think that's the case though,
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