Accounting professor primes students for energy industry

When Shannon Deer returned to Texas A&M University to teach after working for two years at a Big 4 accounting firm in Houston, she knew she wanted to arm her students with information that is practical and can place them in a good job. Her emphasis on the energy industry has provided both.

Deer teaches intermediate accounting at Mays Business School and serves as the assistant department head for the accounting department.

She answered a few questions about her chosen path:

Why it is important for our current students to learn about energy

The energy industry has its own language. To obtain a competitive advantage in the industry, our students need to be fluent in the language. They need to know what operational terms such as fracking, casing, oil sands and even pig (used to clean a pipe) mean. They need to know where major shale plays are located and why Henry Hub in Louisiana, Cushing, Okla., and Mt. Belvieu, Texas, are important to product pricing. A petroleum engineering major or a geology major would likely have this terminology embedded in many courses. Until we started programs specific to the energy industry, most business majors were not exposed to these concepts.

Until our students understand the industry from an operational perspective, they cannot master industry-specific accounting and finance concepts. I want our students to walk in the first day on the job and be able to speak the language and understand a company’s strategy in addition to being able to account for derivatives or exploration costs. Every year I receive emails from former students who are excited because they were able to explain a concept they learned in class to their coworkers who did not attend schools with energy-specific business courses.

Additionally, the energy industry is facing many challenges today. Several examples of risks facing the industry according to Ernst & Young, who employs many of our students, include cost containment, a deficit of human capital, operating in new markets, and managing public perceptions about environmental and health concerns related to new technologies. (http://www.ey.com/GL/en/Industries/Oil—Gas/Turn-risk-and-opportunities-into-results–oil-and-gas—The-top-10-risks) Our students are the future leaders who will manage these issues as they progress through their careers. I want to teach them to think critically about these risks from a business perspective.

 

Why it is important for our graduates to work in the energy industry

It is important our graduates are able to work in the energy industry, because the corporate hub for many energy companies is only 90 miles from College Station — in Houston. Across Texas, there are many excellent opportunities to work in the energy industry and we want to make sure our students are initially competitive for those jobs and can quickly excel in those jobs.

Our students pursue a variety of career paths within the energy industry. Many of our students start their careers in public accounting. Especially for those working in Houston, there is a high probability some or all of their clients will be energy companies. Each year, several students go into consulting and investment banking focused on energy clients or become financial planners evaluating energy portfolios. I have one student who transitioned after several years in energy-focused investment banking to a private equity firm that funds new midstream energy companies.

Energy companies are very eager to recruit our students and are providing excellent and competitive rotational programs designed to give students broad experience in a short period of time. Baby Boomers are retiring from energy companies and need young professionals to fill those positions. Our students who complete rotational programs with energy companies are primed to fill the gap left by Baby Boomers.

Additionally, the energy industry helped insulate Houston and all of Texas from the devastating effects of the financial crisis. We are lucky our students are still being aggressively recruited when some industries were laying employees off.

                 

Programs I have developed

In developing energy programs in Mays, my goal has been to increase the number of cross-discipline opportunities for our students. Very early in our students’ careers they will be working with engineers and geologists in addition to accountants and finance professionals. The following opportunities are now available:

• BUSN 302 — a one-hour seminar, open to all business majors. The course is designed to expose students to operational aspects of the industry, such as exploring, drilling, producing, transporting, and processing oil and natural gas. We have business and operations experts such as engineers and geologists speak to the students in interactive sessions.
• Energy accounting — This course is accounting specific, but carefully links all accounting and finance topics covered to operational issues. Marathon was instrumental in helping me develop projects, which are the center of the course, that provide student hands-on practical experience.
• Phillips 66 Energy Panel — Each semester, including the summer, Mays and Phillips 66 hosts an energy panel. Experienced and new business professionals represent some of the largest energy companies (for example, Anadarko, BHP Billiton, Enterprise, Marathon, Oxy, and Southwestern). Students have the opportunity to interact, in a group of 8-10, with the company representatives who rotate tables over the course of the evening. The event is sponsored by Phillips 66 and is open to students from all majors. See https://mays.tamu.edu/energypanel/ for more information and upcoming panels.
• Halliburton Case competition — Teams for the case competition must include at least three members from Mays and can have up to one member from another discipline. Students are presented with a realistic issue facing Halliburton and given 48 hours to develop a solution.  Halliburton executives judge the competition. Prizes are awarded to first-place through third-place teams in the amounts of $4,000, $2,500, and $1,500 https://mays.tamu.edu/acct/halliburton/.
• Certificate program — The certificate program requires students to take the courses listed above, as well as an energy elective (preferably in another discipline), a required foundational accounting course, and an energy related internship.  The certificate program is especially helpful in matching interested employers with top quality students interested in the industry.
• Energy finance — A course I teach in the Professional MBA program designed to help students consider companies’ strategies when using derivatives to hedge price risk, analyze energy companies’ financial statements, and determine the impact of reserves.
• Energy Club — The Energy Club is an excellent opportunity for students of all majors interested in learning more about energy companies.  I try to speak to them each year and I invite members to all energy related events in Mays.   http://energyclub.tamu.edu/
• Energy Institute — we are now working more closely with EI to create cross-discipline programming for students across campus.