Start by understanding how the oil and gas value chain is divided. Upstream companies explore for and produce hydrocarbons. Midstream businesses transport, process, and store them. Downstream companies refine crude oil and sell petroleum products. Oilfield services companies provide equipment and technical support to producers.
Know how each business makes money and what drives its valuation. An upstream producer is exposed to oil and gas prices, production volumes, decline rates, operating costs, and reserve quality. Midstream companies may have fee-based contracts, but contract structure, customer credit, and commodity exposure still matter. Refiners focus on throughput and refining margins. Services companies depend heavily on producer spending.