I grew up watching movies with my dad. The day I watched Trading Places my life changed. At that point I became fascinated by the mystery of the commodity market. I wanted to be involved in the commodity business in some capacity, even though I didn’t quite know what that meant.
Once I discovered Tulane’s Master of Management in Energy program (MME), it seemed like the perfect opportunity to learn energy fundamentals and develop a professional understanding of the industry. After visiting Tulane for an informational session last March, I was sold.
The MME program is such a unique program. The combination of hands on learning, field trips, guest speakers and industry-focused projects really make it special. The experiences I have had through this program changed my life. I’d like to share a few that stand out to me.
The summer was absolutely draining but I loved every minute of it. We went on four field trips but my favorite was the trip to an offshore platform. I remember riding out to Breton Sound 52 on the supply boat. Platforms dotted the Gulf of Mexico as far as I could see. In our Introduction to Energy class, Professor Eric Smith walked us through diagrams explaining the science behind refineries, drilling platforms, processing plants and power plants. Learning the physical mechanics before our field trips allowed us to understand what processes where taking place at our site visits. Eric Smith literally knows everything about energy. He is a walking Wikipedia. Any energy question you ask he will always have a few stories, a good answer, and a book or a contact. I have sat in Eric’s office on many occasions and every time I left with more knowledge than when I came.
Professor Ken Carroll, who taught our Energy Modeling course, knows Stone Energy like the back of his hand. We built a financial model for Stone Energy. I learned how E&P companies sell their oil at the wellhead and receive a price plus or minus a benchmark. The locations and quality of production determines the premium or discount to the benchmark. There are two global benchmarks for oil, Brent (BFO) and West Texas Intermediate (WTI). As well as regional benchmarks like Louisiana Light Sweet (LLS), which usually trades at a premium to WTI due to the logistic issues at Cushing, Oklahoma. We started off building a financial model for one well and later for an entire company, Stone Energy. In doing so, it made it much easier to see how changes in production, decline rates, pricing, and well cost altered the economic viability of a project as well as the effects on Stone’s financial statements. Professor Carroll used to cover Stone Energy so he understands how to teach modeling because he actually did it. To this day I go by his office to ask him about oil prices, OPEC, shale and of course Stone.
Professor John Foreman has more energy than anyone I know. You want to meet someone excited about teaching come watch Professor Foreman. He drives in from Lafayette on Thursdays to teach our Fundamentals and Trading course. As soon as he walks in the door you better be ready. Professor Foreman works for Petro Quest so he really is concerned about the price of commodities and fundamental dynamics. We were assigned a crude case and were responsible for developing an outlook for crude oil prices based on fundamental and technical analysis. When we presented our crude oil case, Professor Foreman really tried to poke holes in our hypothesis to see what we hadn’t thought of and if we understood what fundamental arguments we were making. That type of scrutiny is what made answering interview questions second nature. Professor Foreman also opened up his contacts and even invited his students to his office in Lafayette. I took him up on both offers. I got to meet a lot of senior management personnel and observe him at work down in Lafayette. As a result, I came out of the class with a real world understanding of the physical side of the business.
The experience gained through field trips, crude cases, and building financial models on Stone Energy was invaluable as I was interviewing for jobs. During many of my interviews I was asked questions about market fundamentals and what trading or investment decisions I would make if market conditions changed. Learning those diagrams in Professor Smith’s class allowed me to speak in great detail about the field trips from a physical perspective. Building financial models with Professor Carroll’s helped me to be able to explain in detail how changes in market conditions flowed through the financial statements. Presenting crude cases and answering Professor Foreman’s rapid fire questions allowed me to develop a physical trading decision supported by my understanding of market fundamentals. All of these skills and in depth knowledge were very helpful during the interview process.
In the fall I interviewed for three rounds with Trafigura, a global commodity trading firm based in Switzerland. Trafigura is one of the largest traders of crude oil in the world. Tulane’s MME program’s professors taught me energy from the ground up and I strongly believe this is the reason why I was able to secure and accept a job offer as a graduate analyst at Trafigura. I couldn’t be happier. In September I will start the first rotation of the graduate program in Montevideo, Uruguay.
In addition to those mentioned above I’d like to thank the following persons, in no particular order, for the support they have provided me during my time at Tulane University: Executive Director Dr. James McFarland, Co-Founder & CFO PerPetro Energy Joe LaBlanc, MME Alum Jamie Berkowitz, MME Alum James Orth, Professor Anjali Sheffrin, Professor Dina Riviere, Professor Jerry Carlisle, Professor Russell Robins, Professor Stan Ellington, Christi McManus, Lorraine Landry, Laney Armstrong, Suzanne Lossi, Linda Ricks, Tony Darensbourg, Kevin Ammentorp, guest speaker Parker Drew, and all of my classmates. Tulane and New Orleans will always hold a special place in my heart.
Chris Ward
Master of Management in Energy Candidate 2015