F?inancial markets are just one of Frank Verducci’s many interests. His interest in flying landed him at the U.S. Naval Academy in Annapolis, Maryland, where he received his bachelor’s of science in economics and a commission as a naval officer in 1993.


During his military career, he served as a helicopter pilot aboard a variety of aircraft carriers, cruisers and destroyers throughout the Middle East, Asia and Central America. His work and leadership abilities impressed his commanding officer, who recommended Verducci for the post of Naval Aide to the President of the United States.


He had risen to the rank of Lieutenant Commander (Select) when he left the military for private industry in 2002, attending the University of Chicago’s Graduate School of Business, where he received his MBA in Finance in 2003.


After graduation, Verducci joined RBC Capital Markets as an investment banker. He worked on equity and debt offerings, M&A and recapitalizations for E&P companies and power producers, including the 2004 sale of Texas Genco Holdings Inc. to private-equity firms The Blackstone Group, Hellman & Friedman LLC, Kohlberg Kravis Roberts & Co. LP and Texas Pacific Group for $3.65 billion.


Verducci was then given the opportunity to join BP Energy Co., which was expanding its presence in the commodity markets. The firm saw that many transactions in the energy sector were being completed by private-equity firms and hedge funds, and Verducci’s experience was a valuable addition to BP’s financial-products team.


Verducci spoke with Oil and Gas Investor about his role at BP, view of the industry and love of flying.


Investor What does your work at BP involve?
Verducci I work with a wide variety of energy and financial firms to structure their risk-management programs, manage their commodity-price exposure, and optimize their energy assets. I structure commodity transactions around their acquisitions, divestitures, and equity and debt financing. I have worked with start-up management teams and multibillion-dollar publicly traded companies. BP is the leading energy merchant in the U.S. We have a strong physical energy platform, a robust multicommodity derivative business and an AA credit rating.


Investor What are some challenges?
Verducci The commodity markets are as volatile, if not more volatile, than the equity and credit markets, so every day you need to be able to think on your feet and work in a dynamic environment.


Investor What do you enjoy the most?
Verducci I like the fact that there are no two days that are alike. I also enjoy working with management teams as they strategically think about the effects of commodity prices on their businesses.


Investor What do you expect in energy M&A in 2009?
Verducci I work with a lot of companies that are formed either as a result of a merger, or are thinking about pursuing a merger to grow their business, so I am familiar with the M&A marketplace. I think you’re going to see the M&A market being driven by the health of the credit markets for everyone but perhaps the supermajors. The largest of the energy companies are likely to make strategic acquisitions in this economic environment that will dramatically alter the energy landscape. The independents and small-caps, though, are highly dependent on the credit market, because M&A at that level is driven by commodity-price forecasts and financing ability.


Investor Who have been some of your professional mentors?
Verducci One of my squadron commanders in the Navy, Captain Joe Lyon, believed in my abilities as a junior pilot, and as a naval officer. He stressed that leaders must always lead from the front. They have to be willing to do anything they ask their subordinates to do, and do it first.
Here at BP, I would certainly say Steve Provenzano. He hired me in 2005 because he foresaw opportunities for working with the increasing number of private-equity firms, hedge funds and mezzanine-debt providers acquiring and investing in energy assets. He appreciated the unique experience I brought to his team, and provided me with the opportunity to succeed and perform at the highest level.

Investor Where do you see yourself in five years?
Verducci I would like to be in a leadership position in the energy-finance industry where I can leverage my previous experiences in the military and finance to create value for a management team and the company.

Investor How do you spend your free time?
Verducci I have two young sons that take up most of my time. Like most people in the industry, I like to play golf, and I also like to exercise. I don’t fly as much as I used to, but I still fly from time to time. I’m commercially licensed to fly both helicopters and fixed-wing aircraft. I either fly with individuals who have a private plane or rent one.

Investor Did you think your early choices would take you this far?
Verducci I have been fortunate to have made the most of the opportunities I’ve been given. I was lucky to be able to receive an education from two of the finest academic institutions in the world. I have also worked with some of the most talented men and women in both the Navy and the energy industry.

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