Breaking into Houston energy groups without being from Texas

A big question I'm getting while networking w/ Houston energy groups is Why Houston? as I am not from Texas.

My answer so far is that I want to work in oil & gas bc of some aspects of the industry (e.g. volatility).

I've never been to Houston and probably won't go with this corona mess.

Would love to hear insight from someone who has broken into Houston banking from outside of Texas.

 

One of these is not like the other. Agree on the experience piece, but the A&M degree is most valuable at an undergrad level. I'm not even sure I've run across anyone with a Mays MBA in the IB space. McCombs and Jones are the way to go.

 

Mays MBA places more like T2 consulting and F500, would definitely not consider it a target for IB. Though if you are a strong networker you could perhaps make it work.

Rice would be my recommendation if O&G banking is OPs preference. However, I think as a sector there will be fewer opportunities as the capital markets continue to dry up. 2 years in school is an eternity in oil and gas.

 
Most Helpful

Maybe you have family in Houston or you like the cost of living advantages relative to other financial hubs such as NYC and San Fran. To my knowledge most banks have structured analyst and associate bases, which typically don't vary for cost of living, so theoretically you are making more. Not to mention, there is no state income tax in Texas, so there is cost savings on that end. Some say the people in Houston are kind relative to some other cities. Also, things don't move as fast down here and people aren't as dick hard about their career. Personally, I love how you get both the big city feel but also have a sense of space with lots of housing with back yards and shit like that. You can also tie it back into the whole O&G thing saying you want to be where the action is, Houston is the energy capital of the world with most O&G companies headquartered here. Only downside to Houston is the O&G outlook and energy transition occurring. You can reference Bobby Tudors recent talk on this for more color, it's quite interesting.

 
OGbanking:
Maybe you have family in Houston or you like the cost of living advantages relative to other financial hubs such as NYC and San Fran. To my knowledge most banks have structured analyst and associate bases, which typically don't vary for cost of living, so theoretically you are making more. Not to mention, there is no state income tax in Texas, so there is cost savings on that end. Some say the people in Houston are kind relative to some other cities. Also, things don't move as fast down here and people aren't as dick hard about their career. Personally, I love how you get both the big city feel but also have a sense of space with lots of housing with back yards and shit like that. You can also tie it back into the whole O&G thing saying you want to be where the action is, Houston is the energy capital of the world with most O&G companies headquartered here. Only downside to Houston is the O&G outlook and energy transition occurring. You can reference Bobby Tudors recent talk on this for more color, it's quite interesting.

After this whole COVID thing winds down will Houston still be a good place to get in on energy action? I ask as O&G (like others here mentioned) has been taking a beating for quite a while.

I have a strong interest in energy transactions/projects in emerging markets, and a background in fossil fuel work (specifically in PR). I also have a international relations master degree from a top tier target school.

I currently live in DC (where I am from) but I am looking to get out of here due to the high cost of living, people, and hyper-partisan culture.

 

Houston analyst here - not entirely clear what role you're looking to break in to (analyst, associate, intern) - but regardless, as long as someone has a logical story and demonstrated interest in Energy, that's good enough for me.

There's a pretty good summary of some of the compelling points to choose enter the O&G IB landscape in this thread here: https://www.wallstreetoasis.com/forums/oil-and-gas-going-to-shiteffect-…

 

Sorry about hijacking op's thread, but when do you see yourself getting back to the office? I spoke to an alum in Houston a couple weeks ago about an opening they had and he didn't say anything about a hiring freeze but I'm assuming there is one since everyone's WFH.

 

Keep in mind also that oil is a shitshow even outside of coronavirus. There is a decent chance that the market bounces back from the virus, and oil is still in the $30s.....that scenario is basically what's playing out now.

 

If oil retracts there will still be a ton of deal flow in restructurings and possible acqs of renewables no? 

 

You sure? O&G is probably the worst place to be right now. The glory days of 08'-14' are over and you can look at the recent GP sales of energy specific PE funds to see that even those management teams / founders are heading for the exits. As I write this, the RRC is discussing mandatory production cuts - something that hasn't occurred since 1972. EP Operators have been lighting capital on fire and the pension funds and New York based investment firms simply don't believe a word anyone in Houston says anymore. Starting in 08', if you were able to raise capital and sell within a couple years you could make out like a bandit, but that game is over - I bet more coal deals get done this year than EP deals.

 

Current Analyst in Houston, would really caution anyone (even Texas schools) on going to Houston. The sector is likely in a secular decline and the transportation sector is going to continue to shift away from oil, resulting in peak oil demand in the next 10 years. Long term industry sustainability and growth prospects are out the window and the Energy PE funds are either going under or trying to transition to renewables/industrials. As an analyst, it is only 2 years but it’s not like being coverage in NY and you are labeled an O&G person from the start. Recruiting to get bayside outside of O&G will be a huge uphill battle, especially as more people jumping ship.

 

Even though US banks obviously underwrite O&G, aren't they leading and transitioning/including deal flow from renewables along with traditonal hydrocarbons? I can see O&G is a declining sector, but are the energy teams not prepared to adapt to perhaps include chemicals/utilities in their coverage or pitch acquisitions of renewables to traditional ong?

 

Oil might be in secular decline but surely gas isn't and the world will always need energy. Probably more in the future than less. The energy sector will obviously have to reinvent itself and shift from its current operations. But, I would see this as an opportunity instead of something negative. You might be at the beginning of an entirely new type of industry and an exciting career if you make the right decisions.

 

This. The world is going to need more and more energy every year. It has to come from somewhere. Right now it's fossil fuels (80% of US total energy), but once renewables become more technologically advanced and economically feasible, they will become more and more widespread. Someone has to provide these companies financial services, right? The industry outlook may look bleak at the moment, but people will adapt and overcome (ex: TPH starting Energy Tech).

 

Credit Suisse just started ESG group out of their O&G arm, I would expect to see this theme across the street. From a power/ renewables standpoint Engie, Sunnova, Calpine, NRG, and EDP Renewables are all located in Houston. O&G major's have their renewable teams outside of TX to my knowledge. Most energy PE funds in the city have or are starting renewable/energy transition teams. TX is the largest wind energy producer in the country. So there is a story for HTX adaptation, but senior O&G executives have to be open to it. I feel most old school O&G guys refuse to see the energy transition writing on the wall.

I think independent O&G companies will first start to take on ESG initiatives so they can raise capital. As the learning curve for batteries, EV, and Renewable power improves the majors will start diversifying more into the clean energy businesses (European majors already are). Eventually, the independents will become the next coal. Gas is huge component of reaching CO2 emission goals, but I just wonder who will be drilling for just gas with low ass prices and potentially no need for the crude besides petrochemicals which is derived from residual crude anyways. I love Houston, so I sure hope it can adapt, but if I didn't have ties here there's no chance I would pursue a career in the city as it's O&G roots may be to deep.

 

So many of these threads noawadays, maybe I should do an AMA. Here’s the reality:

  • I started in power and renewables in NY, was slow/boring and low returning (less true now)
  • Moved to Houston to chase shale and upgrade QOL (Houston is a good place to live)
  • Shale is a horrible industry that destroys capital and pushes away investors -Houston is a decade behind NY, Chi and SF as a finance hub for power and renewables. Minimal talent base, power experts are mostly ex Enron and Dynegy from like 20 years ago -There are a handful of companies and funds in the city that can ride the transition. Most banks are boxed out because power groups in NY clean up the relevant business

What else?

 

Explicabo illum omnis sequi rerum odit et. Dolore autem qui maxime doloremque autem consectetur. Sunt ad vitae ut quo beatae. Dicta et architecto accusamus.

Soluta nemo nihil tenetur ut id et. Quam doloremque ut expedita eum. Sed ea ut consequatur dolores minus dolorem et.

Repellat occaecati veniam aut eos aut magni. Quia enim aut laudantium eligendi sint aliquid. Quas quae voluptatem odit laudantium in fugiat. Deserunt est iure voluptatem ut atque. Quis blanditiis ab voluptas voluptatem. Ut voluptas dolorem sunt modi nostrum.

Quaerat assumenda nesciunt fugit. Sint et rerum autem rerum ad fuga delectus quia. Eum voluptas iure ullam voluptates molestiae explicabo eum.

 

Nulla repellat et exercitationem dolor atque quisquam. Fuga numquam minima repellendus modi qui architecto. Quos debitis ut veniam reiciendis magnam. Ea laborum quis inventore ut ab. Quia quia ipsa dolorem omnis consequuntur placeat ad perspiciatis. Perferendis error aliquid repudiandae quaerat quidem eos. Porro error veritatis eligendi qui animi minus aspernatur.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
dosk17's picture
dosk17
98.9
6
DrApeman's picture
DrApeman
98.9
7
kanon's picture
kanon
98.9
8
CompBanker's picture
CompBanker
98.9
9
GameTheory's picture
GameTheory
98.9
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”