Vault.com - the most trusted name in career information

Careers in Corporate Finance in the Energy Industry ??? Vault Career Advice Article



This article is excerpted from the Vault Career Guide to the Energy Industry.
Read more excerpts or purchase the guide
Get the inside scoop on top employers with Energy/Utilities Employer Surveys and Oil/Gas Employer Surveys


Careers in Corporate Finance in the Energy Industry

In a utility, pipeline operator, or oil company, the corporate finance group plans and facilitates financing for a company's construction and acquisition activities. Typically, when the corporate finance team becomes involved in a project, a strategy or business development group has determined the parameters of the investment: what should be built, where to build it, how big and with what technology. Corporate finance people identify the means of funding the project and precisely how to structure the transaction:

  • Ratio of debt to equity
  • Type of debt--private placement, non-recourse, convertible, etc.
  • Price of the debt--interest rate, index, fixed vs floating rate
  • Terms--life of the loan, tranche structure, repayment covenants, etc.

Additionally, corporate finance validates the revenue and cost assumptions that the strategy people used to justify and receive senior management approval for the project. They prepare a valuation model to be shared with lenders, and market the investment to banks via a detailed offering memorandum and face-to-face presentations.

As with many careers, corporate finance comes in multiple flavors--so make sure you understand the vocabulary of functions specific to each company with which you interview. For companies not heavily involved in developing, acquiring, selling, or funding improvements of physical assets (e.g. refineries, equipment manufacturers), corporate finance groups often incorporate treasury functions: managing working capital, accounts receivable, billing, and financial reporting. They may also handle regulatory compliance, and in particular Sarbanes-Oxley compliance. Large oil companies often have separate Resource Exploration groups that evaluate and purchase rights to drill for oil, while the Corporate Finance group exclusively focuses on financing production fields.

To fulfill all of these responsibilities, corporate finance interfaces with internal strategy, business development, engineering, trading, accounting, and legal groups, as well as outside counsel, joint venture partners, and of course the many banks interested in lending money to the company. In a company particularly active in building, expanding or acquiring assets, the corporate finance job is akin to working in an investment bank.

Corporate finance employees are often generically referred to as "analysts," regardless of level. Formally, however, an "analyst" is usually someone with a B.A., and an "associate" usually has an MBA or a number of years' experience. Depending on the company culture, young associates may actually have more lofty titles such as "principal" or "assistant vice president." Corporate finance jobs don't require a "technical" degree such as engineering, math or hard sciences; however, people with such backgrounds tend to self-select into these jobs, particularly in the oil and gas sector. Generally, employers look for people with experience building complex financial models, keen attention to detail, and a demonstrated interest in their portion of the energy industry.

This article is excerpted from the Vault Career Guide to the Energy Industry.
Read more excerpts or purchase the guide
Get the inside scoop on top employers with Energy/Utilities Employer Surveys and Oil/Gas Employer Surveys






Read More Career Advice on Vault

A Day in the Life
Sample Resumes
Sample Cover Letters
Sample Interview Questions & Advice
Thank You Letters
Browse Industries



Recommend this page to a friend