Breaking into Oil & Gas / Energy as a UG

gkindle1's picture
Rank: Monkey | 40

In the very least, I wanted to create a general forum for advice to both aspiring UG interns (like myself) and other looking to get into the complicated field of oil and gas banking. I'm not the only person interested in oil and gas and I won't be the last either, and I think a very general discussion forum around the topic would help a lot of us.

So, being from Houston, I've always been around oil and gas. My dad manufactures for downstream, and my grandfathers were both petroleum engineers and managers in their own right, so I have a bit of family history as well. I've applied to SA 2019 positions in NYC and Houston - both of which have the capacity to do work with O&G banking - so, if it isn't obvious, I have a decent amount of interest in the industry.

What kind of special things should you expect from an analyst-intern point of entry? I know knowing the differences between upstream, midstream and downstream are a must, as well as knowing the price of oil as a commodity, but what other technical things should I expect from an interview, and what resources would you suggest to help prepare for them?

As a follow-up, how much does energy (including O&G, but also including renewables) as industry coverage differ from a pure O&G coverage? How much harder or different is it to break into general energy and not just oil and gas? Any and all thoughts are much appreciated.

Comments (6)

Most Helpful
Aug 28, 2018

Few talking points are:

Upstream
- Know your plays: Permian (Midland vs Delaware), DJ, Eagle Ford, Powder River, Bakken etc.
- Within plays: resource targets and characteristics e.g. what differentiates a Wolfcamp developer in Permian vs a southern Eagle Ford operator (hint, hydrocarbon make-up)
- Know your operators: who plays where and with what strategy: are they a Pioneer, big, well capitalized, and drilling the piss out of their tracts or are they smaller Callon/QEP type and are focusing on testing formations or drilling to hold.
- Be able to talk about some recent deals (Concho/RSP, Diamondback/Energen/Ajax)
- Understand capital markets for these companies in a recent historical context: not a lot of recent IPOs/equity market issuance; understand reserves based lending and the trend of revolver facilities among these types of companies; further reading - why do all investor presentations speak to "living within cash flow" and what does that entail for capex decisions
- Know whats going on in commodity markets and how it relates to on-the-ground production: "why is Midland trading at a significant discount to NYMEX WTI"
- Further to the last point: know your pricing benchmarks (Cushing, Midland, Gulf for oil and Henry Hub/Waha for gas)
- Know how hydraulic fracturing works at a reasonable degree of granularity and why its important: extended laterals, zipper fracs, proppant types, water needs etc.
- Know production characteristics for HF wells: why do they decline so fast and what do operators do to enhance well completions
- Basic understanding of current operator hedging strategies: basis swaps, collars, and why its playing an important role today

Bonus round: form an opinion of the current basis differential between Midland and Cushing prices and explain how it will affect certain operators and how they might use capital markets to alleviate their pains/play to their strengths.

Being able to tie all this together is probably a lot for the analyst level but having a big picture understanding of whats going on in O&G will speak to your interest in the industry.

    • 12
Aug 28, 2018

Awesome, thanks. I had no clue upstream got so complicated. Do you have any advice on how to link upstream activities towards the downstream, if an interviewer asks? Or will the bulk of the interview be on the macro-environment and upstream operations

Garrett E Kindle

Sep 14, 2018

Hey Walker, any chance I can PM you? I have some questions about exit opps with Energy IB - I would love to speak to you

Sep 16, 2018

Sure shoot it over

Aug 28, 2018

Group dependent so know who you are talking to. I focus on upstream so I don't have as much to say about the other legs of the value chain save for midstream, especially in the Permian is a very hot topic and will be good to understand who is moving scale to where. Currently pipes are at capacity until several new projects come online next year: Cactus II, Grey Oak and others, I think Permian Express II? You could talk about downturn punitively reducing new pipe builds '14-'15 being the genesis of current pricing disparity and now options are limited to DUC-ing wells or putting crude on more costly modes of transport (trucking/rail) if it comes available in a meaningful scale.

    • 4
Sep 13, 2018
Comment