Oil and Gas IB Technicals SOS
Hey Everyone,
I am a undergrad from a non-target and about to interview with Lazard. The group I will be interviewing with works primarily in oil and gas M&A (A&D) type activity.
Does anyone have any idea of the types of technicals related specifically to this industry that they might ask? Based on the research I have done and from chats with people in the office, it seems like they endeavor to be particularly clever with their questions to discourage straight memorization of facts.
So far I'm thinking they might ask about specific energy industry jargon and specific accounting methods for O&G and tax treatment for M&A and O&G, as well as energy industry multiples...
Still, I'm desperate for more specifics of what they might ask, so if anyone has any ideas, I am all ears. Thank you!
Best,
IB Trying
nah dawg maybe demonstrate an interest in the sector and have the standard technicals down. A&D market monitor below can inform your industry thoughts/questions: https://datarooms.ca.bmo.com/Login%20Page%20Document%20Library/ADLibrar…
I was curious about the O&G space once upon a time and watched a youtube video that explained the valuation of oil deposits and accounting treatment of the expected barrel production from said well. Youtube is your best bet as well as reading through an explorer's 10k.
I know some Houston LAZ guys pretty well. They don't do have an A&D team, so everyone touches all the verticals. They focus mainly on upstream and OFS, haven't heard anything on midstream but they could have some. Lot of RX recently (for obvious reasons) so you might want to look up some of those mandates.
Can't say whether or not they'll get super industry specific with you but if you make it known that you're not an O&G guy then they'll likely stick to high level O&G and will focus more on general valuation. But if you can learn about the following then you'll be more than ready imo.
Read this and get a general idea of the process (exploration->production->transport->refining->end user): https://www.wallstreetoasis.com/files/DEUTSCHEBANK-AGUIDETOTHEOIL%EF%BC… Skim the first 120 pages or so and you'll have a good understanding of E&P.
Valuation: Upstream - comps (EV/Reserves, EV/Production, Reserves/Production -> life of assets), NAV (not a DCF), precedents Midstream - comps (normal but add P/Dist. CF), MLP DCF (two stage, a little different), precedents OFS - comps (normal), DCF, precedents Downstream - comps (don't think there's anything special here), DCF, precedents
Upstream knowledge: Know what PV10 means Know the different types of reserves/wells (1p, 2p, 3p; PDP, PDNP, PUD, DUC, etc) Know how a NAV works at a high level and why a DCF doesn't work Understand successful efforts vs. full cost accounting (just at a high level)
Midstream knowledge: Understand the basics of an MLP and its tax consequences Know why you have a two stage DCF and not just one Know what an IDR is Know why infrastructure is an issue/where there are bottlenecks
Downstream knowledge: Have an idea how refiner margins change with oil price Know what a crack spread is
OFS knowlege: Lot of recent M&A/JVs Have a general idea of what OFS is and how they work with E&Ps
If you can understand all of the above well enough to talk about it at a high level, you'll be way ahead of the game. Also, If you can get your hands on some ER, then just do a search for energy stocks and read the weekly overviews on each vertical.
I'd check out Breaking into Wallstreet youtube, they have some stuff regarding O&G
BAD CALL. Do not pay for this stuff. Plenty of free resources online like the other stuff people linked to. Good to demonstrate interest in the space, but no one expects you to come in and be an expert - that's why you're trying to get the analyst role. Most important thing is to be humble in the interview and not invite unwanted technical questions by being a douche.
Don't pay for shitty study materials. Google is your friend.
If you were insinuating that I was saying he should pay, I'm not. If you go to BIWS youtube channel, there are some decently extensive FREE videos related to O&G. Not comprehensive but I was able to learn quite a bit.
I'm just assuming this since you replied to my comment :)
Seconded. The BIWS channel is solid, gives good explanations. That said, your head might be spinning a bit because you're only going to get certain lessons.
True, you're going to have to connect some of the dots on your own. But they have some free models you can leverage as well.
Its been a while since I've been on there, so there could be some more free videos.
Thank you all so much, this really helps!
Had an interview with their MM O&G group last year (also non target, didn't get offer). Know the sellside process cold. lower level guys were really cool mainly asking behavioral qs. MD had me do a walk through of how I would take a steel company that makes garage doors in the southeast through a sale process. I spent a ton of time on O&G, and I don't think I used any of it
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