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Cool Careers in Accounting Ep. 35 - A Look Inside The World of Oil & Gas Accounting with Rayna Kordonowy
204 Plays4 days ago
What does it take to build an accounting or finance career in one of the most volatile industries in the world? CFO Rayna Kordonowy shares how she went from small-town Montana roots to leading finance at United Energy Corporation—spanning oil and gas production, power and gas marketing, and large-scale commodity trading. Hear how her team navigates commodity swings, hedging, complex consolidations, and fast-changing ESG rules, plus why she believes AI won’t replace accountants—but will reshape how they work.
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Transcript
Introduction and Background
00:00:09
Speaker
everyone, it's Mike Potenza from Becker Accounting Podcasts, and we are back for another episode this week. And we have a really interesting guest. Her name is Raina Kordnoy.
00:00:21
Speaker
And Raina has grown up in the world of accounting. She's now in finance, and she is in the oil and gas industry. So she has a really interesting background and perspective on oil and gas and how it all ties together in the world of accounting and finance. So, Raina, I'd like to thank you and welcome you to the show.
00:00:41
Speaker
Thank you, Mike. I'm honored to be here today. Longtime listener and now joining as a guest. Feels like this has come full circle in a way. Excellent. Well, I want to hear how it's come full circle because I know you have a really interesting background.
00:00:54
Speaker
But before we dive into the weeds and the details of everything that you currently do, let's just go back to where are you from and where did you grow up? Give me a little bit about the Raina background.
Life in Oil and Gas Regions
00:01:07
Speaker
So I currently write reside in Bismarck, North Dakota, where I'm the chief financial officer of United Energy Corporation. In addition to both of our careers, Matt and I have approximately 300 acres and enough cows that even as the accountant, I have lost count.
00:01:21
Speaker
When I'm not at work, you'll probably find me at the ranch, outside enjoying the outdoors, traveling, or catching up with friends. I grew up in eastern Montana in a town called Sydney.
00:01:31
Speaker
I was an only child, and I grew up on some acreage in the country where my parents always had cattle and horses. My dad worked in the oil and gas industry throughout my childhood.
00:01:43
Speaker
There were multiple buyouts throughout his career. However, while I was in high school, it became ExxonMobil, which is a name that probably everyone listening to the recording today is familiar with, and that's ultimately where he is today.
00:01:54
Speaker
My mom was a stay-at-home mom and did all the things with me as a child and ultimately went to work when I was in second or third grade, but always remained the flexible parent to call off work if I was sick or had a school activity she needed to volunteer at.
00:02:07
Speaker
So raised in a small rural community, that's kind of my background. Interesting. So did you say you grew up on 300 acres or you live on 300 acres?
00:02:18
Speaker
I currently have 300 acres. Oh, okay. Wow. That is a lot of ah grass to mow. Do you do that yourself or what do you do? The cows mow that. All those cows we have mow that grass. yeah How many cows do you have?
00:02:32
Speaker
Well, so many that I've lost count, but I would say upwards of 150 to 160. It's a full-blown cow-calf operation.
00:02:44
Speaker
So a the mama cows will have calves every year and we will either retain the calves for breeding in future years and or to go to a feedlot where they will ultimately become beef or we will sell the calves off and start all over again next year. Kind of depends on where we're at in the year and what we're doing with the ranch.
00:03:06
Speaker
So interesting. So now you grew up in Montana, but you're currently in North Dakota. Is that correct? That's correct. And you told me a fun fact. I wish I could remember what it was about um the number of cows in Montana.
00:03:20
Speaker
There are more cows than people. that Is that really true? There are more cows in Montana than actual human beings. Yes, that is true. do do the Do the cows vote or no, just the people vote in Montana?
00:03:33
Speaker
Just the people vote in Montana. But i mean, i think sometimes people would wish that the cows had a voting option too. ah Wow. So that's so
Influence of Family Career Paths
00:03:44
Speaker
interesting. So your dad was in or still currently in the oil and gas industry as well?
00:03:49
Speaker
Yes, that's correct. He is still in the oil and gas industry. And he's actually always been more on the production side. So always more in the upstream end of the business.
00:04:01
Speaker
And that's still where he resides today. But yes, I grew up with oil and gas being talked about right at my dinner table every single night. So did that pretty much shape your future path that you said, you know, my dad's in oil and gas and it seems like that's an interesting place to go. So did that help you choose the college and the program that you studied?
00:04:23
Speaker
So I fully believe that having my dad in the oil and gas industry is ultimately what sparked my curiosity and also my passion for the energy sector. um The energy sector has a special kind of energy, no pun intended there.
00:04:37
Speaker
And once you're exposed to it, it's really hard to separate from energy. um I was very familiar, you know, that the industry was volatile and it's based on commodity swings. And at the time that we're recording this podcast today, we can look back at what the price of oil has done the last few weeks with the tension in the Middle East.
00:04:55
Speaker
And we can see that it's been all over the map. And so as many of the people in the industry will say, you know, you're driven by booms and bust periods. And so...
00:05:07
Speaker
I would say that having my father in that industry is what sparked my curiosity. i think overall the community of Sydney sparked my curiosity too. um That community was a very small rural community where the economy was largely driven by either farming, ranching, or the energy space.
00:05:24
Speaker
Primarily oil and gas, but there was a power plant in the community and a coal mine that fed that power plant about 20 miles south of the community. So I grew up in a community where primarily all the industry was based on commodity markets, whether it was farming, ranching, or energy.
00:05:42
Speaker
And I think that that's just what led my passion to be in a commodity-driven business, if I'm being fair. So Sydney is the name of the city or the town in Montana where you grew up?
00:05:54
Speaker
That's correct. Now, do you still have family in Montana? You go back and visit much? Yes. So I'm a first generation college kid in the family. And so i was one of the first ones to really leave the community and go out and do my own thing. And that's something that
Educational Journey and Career Path
00:06:12
Speaker
has been an interesting journey in itself. ah But yes, all of my family still resides in Sydney.
00:06:17
Speaker
My mom and dad are still there. My grandma, who's 100, is still living there. um Aunts and uncles are still in town. Many younger cousins are still there. And so I do go back as we can. But, you know, with our own cattle operation, both of us having careers and being very busy, you know, it is limited to holidays, major birthdays, those kinds of things of when I can make it back.
00:06:42
Speaker
But it's about a three and a half hour drive, pretty easy drive. So I'm able to get back when I can. So you're on in finance for United Energy.
00:06:53
Speaker
And now is it um your spouse that runs the cattle farm? Yes. he He is there Monday through Friday, and I make it there on the weekends. So he does carry the majority of the load during the week, and I give him credit for that.
00:07:09
Speaker
ah He also has a career, so he's employed with ExxonMobil as well. So he's in the energy space as well. And he's in global projects and procurement, so his job is pretty demanding as well.
00:07:22
Speaker
Wow. You definitely know dust collecting on either one of you two, that is for sure. no So where did you then go to school? Did you go to school in Montana or did you at this point already move to North Dakota? How did that work?
00:07:38
Speaker
So after a last minute pivot, ah due to deciding that I was no longer going to go to school to be a petroleum engineer, I chose to study accounting. And when I pivoted my career choice, I pivoted my college. And that's where I chose the University of Mary in Bismarck, North Dakota.
00:07:57
Speaker
It was a smaller private university located in Bismarck, North Dakota. And after growing up in a smaller rural tight knit community and touring that campus, I felt very much like it was home for me.
00:08:11
Speaker
And so that is where I planted my roots and did college. but you You mentioned a pivot. What did you pivot away from? So I had spent all of my childhood and honestly all the way through high school planning to be a petroleum engineer. And in high school, I was granted the opportunity because of my dad's career to work alongside an engineer within his organization. And it was XTO Energy at the time. Exxon Mobil hadn't done their acquisition yet at that point.
00:08:44
Speaker
And so it was a little bit smaller company, smaller footprint. And I did really enjoy the work that this engineer was doing, and it intrigued me, and I was passionate about the industry for sure.
00:08:57
Speaker
But at that point, the shale revolution had not happened in the United States yet. And so when you were going to go to school to be a petroleum engineer at that point, there wasn't really any guarantee that you were going to be located in the U.S.,
00:09:13
Speaker
And for me, being an only child, I didn't know how far away from home I really wanted to go. and at that point, it was kind of even mentioned, you may have to go to Saudi Arabia if you are going to have a career in petroleum engineering. And I didn't know if I felt comfortable with that.
00:09:29
Speaker
And so... I pivoted and decided that I would go to school to be an accountant and shocked my family. And I think all of my friends for that matter, because I had been through physics to chemistry I had taken some college credit courses for that and was on track for engineering. So it was definitely a change of pace.
00:09:50
Speaker
So I grew up in New York City. So when we say this phrase oil and gas to me and growing up in New York City, oil means the big oil truck comes and they fill up the oil tank. So we get heat in the house or I take my car to the gas station. I put gas in. That's all I know. You said something about a shale revolution or shale. what What's shale and what does that do that changed what you were thinking about?
00:10:13
Speaker
So the shale revolution is what kind of put the Bakken and ultimately what we hear the Permian on the map for. So all of that, they're drilling into shale rock. And through the technology find of hydraulic fracturing, ah we learned that we could get oil out of that shale rock. And prior to that, there were wells drilled in eastern Montana and western North Dakota. And they had been drilled, you know, dated back to the first well in the 50s, I believe.
00:10:43
Speaker
So there had been multiple wells drilled already, but the oil reserves, we didn't know what they were because we hadn't had this new technology. So...
00:10:56
Speaker
Through hydraulic fracturing, we we were able to discover that there was a lot more oil in the ground than we ever estimated and that we also could now get it out. And so through that process, ah that's when the Bakken formation really kicked off. And I would say it started to kick off in 2008, 2009. So my first or second year of college is when it really started to kick off.
00:11:22
Speaker
And then started to expand even more 2010, 2011, and 2012. And I think that's what kind of put North Dakota on the map. Everybody in the country was going, what's going on in North Dakota? I mean, I remember there being Wall Street Journal articles about North Dakota and the Bakken boom that was going on. And so that drastically changed the oil and gas game here and created a lot of opportunity in this state.
00:11:49
Speaker
All right. So you you thought you were going to go into that, but then you realize, you know what? I'm more intrigued by the accounting end of this, maybe even the finance end of it. So you go, you go through your accounting program, then you graduate and you right away get a job as an accountant. You get your CPA license. What happens after college?
00:12:10
Speaker
Okay. So I actually interned during college with a public accounting firm here in Bismarck, North Dakota. And at the time, their name was Widmer Roll. And they were a small regional firm. They had three offices across the state of North Dakota and did audits and tax.
00:12:28
Speaker
And so I interned with them, and as I was coming up on graduation, they offered me a full-time job. And so I accepted that job and went to work with them full-time. I did not take my CPA exam right away, and people ask me why.
00:12:43
Speaker
And I always say, much to my parents' dismay, I got very lost in the career shuffle and also just living. I had completed about 172 credit hours of college courses in four years, and i didn't waste any time or let any dust settle on studying to get that done.
00:13:04
Speaker
And i think once I got out, the busy season hours actually seemed much easier than college did. And so I enjoyed that time and traveled with some friends, and i ended up taking my CPA exam later than normal, but that's okay.
00:13:23
Speaker
All right. So your first job is at Widmer Royal and you were working for them in what? Audit, tax, what would you do? What type of work? So when i originally accepted my internship, it was a tax internship. And so my first quarter there, i started on January 1st. So you can about imagine how the first quarter went. We were really busy in tax season and I worked on a lot of tax clients.
00:13:48
Speaker
And Through that time period, they learned that I was very familiar with oil and gas and the terminology in oil and gas from growing up in it. And so when the summer hit, they actually put me on the United Energy Corporation audit.
00:14:03
Speaker
And so I came out and was on the audit team for United Energy Corporation, and that's where I got familiar with the client. And for the next two years while i was at Widmer Roll, I did both audit and tax.
00:14:16
Speaker
I would work on audit season for like my audit season would kind of kick off for the United Energy Corporation audit, which the fiscal year end was June 30th. And then I would help with some nonprofit and local government audits in the fall.
00:14:32
Speaker
And then once we came out of those, I would always go into tax season. That is pretty amazing. There are not many people that can say they have their hands in this many pots. Well, between the audits, good enough, but then throw the governmental audit and then the tax on top of it.
00:14:48
Speaker
That is some really great experience. Now, how long did you do this for Widmer Roll before you left to go to full-time to United Energy? I was at Widmer Roll a little over two years, ah two years and three months approximately is how long I was there. And I did really enjoy the work. I mean, a lot of people will say they don't enjoy public accounting because of the long hours or just the stressful times. But I actually did really enjoy the work. But the main thing that pivoted me out of it was i truly was missing the energy space.
00:15:25
Speaker
And I was trying to figure out how I was going to get back in the energy space. And mind you, at this point, I hadn't taken my CPA exam. So... That was still on my mind. Taking the CPA exam was still on my mind.
00:15:40
Speaker
But I was also contemplating going to law school and maybe focusing on tax law and going to work in a place like ExxonMobil or Chevron or kind of going that route.
00:15:52
Speaker
I was a little bit on the fence with what I was doing when United Energy Corporation actually gave me a call. and told me that they were opening an accounting position. And if I was interested in it, it was mine.
00:16:03
Speaker
It was a a little bit of a pivot to what brought me here today. And the interesting thing that I just caught from that is you leave a public accounting firm, you go corporate, no CPA, but now somehow after leaving public accounting and going to this corporate job, you have a CPA.
00:16:24
Speaker
So where did that happen along the journey? Okay. So when I came to United Energy Corporation, i would say it was about 20% of the size ah employee-wise as it is today.
00:16:40
Speaker
That's how drastically we have grown since I came on board. And so we had a much smaller group. I mean, even when I think about my direct reports today and those that are directly on my team at the parent corporation, much smaller footprint than we have today and even where our vision is going forward.
00:17:02
Speaker
And so when our controller at the time retired, ah We brought in a new controller and she ultimately became our CFO prior to retirement. That's where we grew to. Like when I first came on board, we didn't even have a CFO. Like the reporting structure kind of stopped at the controller level. And so when Janelle came on board,
00:17:25
Speaker
There were a lot of things that she had to learn about our company and how we did things and even about just this sort of the energy space. She had came from a utility and so very different than our trading arm and oil and gas production unit.
00:17:44
Speaker
So her and I worked very closely. Probably the first time eight months to a year that she was here working on some of our financial reporting, doing some upgrades to different things, how we did our cash flow statement, how we did our equity roll forward, how we did our consolidated statements every month, just working through those processes and like improving them.
00:18:06
Speaker
And she asked me one day, she's like, why don't you have your CPA yet? And I looked at her and I said, you know, I've just always been lost in the shuffle. You know, like something's just always been going on that has deterred me from doing it. And she goes, well, I think you have some talent.
00:18:26
Speaker
I really think you should consider it. And that was probably the pivotal moment for me that made me go home and really think about what I was going to do change my future and take that CPA exam. i I knew that I had to do that to get to the next level. And i think I was finally at the point where I was ready to do it.
00:18:48
Speaker
And so, was that a long process for you? Because you're now working full-time, you decide to sit for these exams, prepare for them, sit for them. And you're now, how many years removed from college when you decide to do this?
00:19:03
Speaker
Okay. So, At that point, I was a solid six years removed from college, at
Pursuing Professional Credentials
00:19:09
Speaker
least. Could have been seven. But I thought about it. And another thing that had always been on my to-do list was to get my master's. I knew that I didn't need to obtain my master's because I had the credit hours to sit for the exam.
00:19:25
Speaker
But obtaining my master's was always something that was important to me. So I thought about the whole process and... Thought about how I should go about doing that. And so that was the point where I made the decision to obtain my master's of accountancy.
00:19:39
Speaker
And I did that through the University of Oklahoma. And I started that process in 2018. And I finished that in December of 2020. And right after finishing that process is when I started the process of taking the CPA exams.
00:19:55
Speaker
I sat for my first exam in March of 2021, and I sat for my last exam in October of 2021. So when I finally decided that I was going to do it, I just sat down and I got it done. And I, you know, I tell people to this day, it's a mindset.
00:20:12
Speaker
Once you tell yourself that you're going to do something and you set that time aside to do it and you hold yourself accountable, the process goes pretty fast. Well, that is pretty impressive because it sounds like it was ballpark about seven months to prepare for the exam, sit for them, pass them all while working full time. Is that about right?
00:20:32
Speaker
Yes. And a really unique thing that was going on during that time is we were actually going through a massive acquisition at the company. And it was one that was going to require a lot of regulatory approvals.
00:20:45
Speaker
And we weren't 100% sure that we were going to get those regulatory approvals. So we were not hiring additional staff to help us with that acquisition because we didn't want to have to lay staff off if we didn't get the necessary regulatory approvals. And so Janelle and I were also helping the team that was working on that acquisition pretty intensely to get that acquisition through. so 60, 70-hour work weeks were pretty normal during that time, and then carving out time to study as well.
00:21:18
Speaker
And having a personal life and obligations outside of all of that with cattle and family and all of those things, it was a lot during that time. i I cannot even imagine it. I really cannot. And ah shameless plug, you did use Becker to prepare for the CPA exam.
00:21:35
Speaker
Yes, I did use Becker. And i have told multiple people that have taken the exam after me. ah It's a wonderful study resource. And if you put your timeline in there and you put your test dates in there, and I know when I took it, I don't know if it's changed. It gave you an idea of how much you needed to study every week. And it gave you a study plan. And I tell people, if you follow the plan,
00:21:58
Speaker
And you put the time in and you figure out whatever way works for you. For me, I had to take some notes on some key things that I wanted to stick. But if you find a way, whatever works for you, you will pass the exam. There's no ifs, ands, or buts about it.
00:22:14
Speaker
that's That's a great story. Truly is a great story. And what is also so great about it is this person, Janelle, who sounds like she was a ah fantastic mentor for you. And im forgive me if you mention it, but I don't recall. What position did she have at United Energy? And what's your relationship with her now?
00:22:34
Speaker
She was ultimately our CFO up until retirement, and her and I still stay in close contact. i I told her that she couldn't retire unless she agreed to always be a senior advisor when we needed a senior advisor, because there's just one thing that you can't take away from somebody, and that's the years of experience and the knowledge they have just from being in the rooms when unique things go on.
00:22:57
Speaker
And so her and I still have a really close relationship and I anticipate our relationship will be close for the remainder of time. yeah But and she was a pivotal piece in our growth and getting our financial reporting and our entire accounting department set up for success in the future.
00:23:15
Speaker
So we will always be thankful for her and everything that she did for us because she set us up for a lifelong of success if we want to follow on that foundation.
00:23:29
Speaker
It's such a common theme for people I get to talk to who are like yourself, very successful in their careers. It always seems that they have that one or those two mentors that really help guide them and you know direct them down the path. So ah you hope that one day you're going to be that mentor for someone and just kind of pay back the system, so to speak.
00:23:51
Speaker
Yes, exactly. So you're now at United Energy. You have your CPA. You've gotten your master's. So you could breathe a little bit more, right? Hopefully you have a little bit more time in your life.
00:24:04
Speaker
Talk to me now about what you've been doing at United Energy. you know, what position did you start out and what title do you hold now? And what is your current job entail?
Career Progression at United Energy
00:24:16
Speaker
So when I came on to United Energy, they were, i mean, their E&P unit, which E&P and oil and gas stands for exploration and production, was really taking off because of that Bakken shale boom that i referenced earlier in the podcast.
00:24:33
Speaker
And so their well count was growing drastically. And with that, there was a lot of accounting work that needed to be done. And the other side of their business that was growing drastically was the commodity trading side. And one of the banks told them, you know, I think you guys have gotten big enough that you need to move to a big four accounting firm to do your audit. And so they were actually going to be transitioning away from Widmer Roll and moving to Deloitte to do the audit.
00:25:01
Speaker
And They needed somebody to come on and help with their reserve valuations and do all of that internal work that actually our firm had been helping them with. And so when I first came on, that was kind of what I was asked to do.
00:25:17
Speaker
Help with the oil and gas accounting and also help with those reserve reports and be that middle person between the reserve engineering and accounting, so to speak. to get those reserve valuations completed. And so from there, an i i grew to a senior accountant. And with that, I had some more financial reporting duties across the entire corporation and all of our business units and just had a more...
00:25:45
Speaker
present ah seat at the table in our audit process, I would say. And then the next step was assistant controller. And there I felt like I just got more financial reporting duties, implementing accounting standards across the organization and those kinds of things. I helped with the revenue recognition standard when that one came out as an assistant controller and then grew to controller where just more and more responsibilities came on my plates. I was no longer helping with the accounting standards. I was implementing them.
00:26:18
Speaker
So in that seat, i implemented the lease accounting standard for the entire organization and also the current expected credit loss standard for the entire organization.
00:26:28
Speaker
And then i took the step of becoming responsible for our banking relationships and all of those sort of things with our lenders and stepped into the CFO role upon Janelle's retirement. so Excellent. Excellent. And as soon as you stepped into that CFO role, it became so much easier, right? You have so much less to do now, right?
00:26:54
Speaker
Yeah, exactly. i What do they say? You step into that role and everyone else does the work? I mean, that's what you always hear people say, but that's not the truth. I mean, there are a lot of different moving parts. And, you know, some days I feel like all I get done is read emails and respond to emails.
00:27:11
Speaker
But then there are other days where you feel like you're actually making a difference. So it's just a it's just a much different role. I will say that. Excellent. Excellent. Well, congratulations on that new CFO position. I know that's a very big title and there is tremendous responsibility that goes with that.
00:27:28
Speaker
And looking up your company, the United Energy Corporation, it's also a parent that has many subsidiaries. Maybe you can talk about what the subsidiaries are and how much you have to be involved with the management and what they do.
00:27:42
Speaker
Yeah. OK, so United Energy Corporation is a privately held family owned energy company with what I like to say are four main subsidiaries ah within our reporting structure.
00:27:55
Speaker
So we have Missouri River Royalty Corporation, which is the entity that I previously mentioned in kind of where I started. And that's our exploration and production unit. And that's where the majority of our oil and gas production is at We have Rainbow Gas Company, which is a natural gas marketing company, and they focus on a mainly one specific pipeline in North Dakota.
00:28:17
Speaker
But they do have access to other pipelines ah across the state of North Dakota. But their goal is to deliver gas to commercial end-use customers. So think about universities, hospitals, manufacturing facilities. Those are their main customers within the state of North Dakota.
00:28:35
Speaker
And then we have Rainbow Energy Marketing Corporation, which that entity is largely related to the power industry. So they trade power and electricity across the United States, Canada and Mexico.
00:28:50
Speaker
And they do have a small natural gas marketing division, which is in this located in the southeast section of the United States. And then we have United Energy Trading, which that is our large commodity trading unit. So that company trades everything from crude oil, natural gas, refined products,
00:29:10
Speaker
those kinds of things across the United States. And they have recently gotten into metals. So our first boat of aluminum should be arriving in the United States any day now.
00:29:23
Speaker
And so we have officially ventured into metal trading there. So I say we're not only an energy company anymore. We've ventured into the metal space. That is really amazing. i The diverse a management of these different commodities and resources.
00:29:41
Speaker
I can't imagine how do how does the consolidation of these financial statements work? And has it been a real challenge for you to get your hands around all of this? It's a really massive consolidation. And that's where I give Janelle a lot of credit. I mean, she came in and really helped us with some of those reporting things.
00:30:01
Speaker
I remember prior to Janelle, we were doing like we were finding all of the intercompany eliminations manually by going through and we had a specific spreadsheet that we would utilize and You know, we knew that we needed to go to these do to due to do from accounts and get the balances. And that's how we handled, you know, the eliminations. And we were much smaller at that point.
00:30:22
Speaker
Today, we have 42 companies that are within our elimination. report And so, well, some of those are maybe small holding companies that just hold the company fleet of vehicles or something.
00:30:36
Speaker
Some of them do have other operations that consolidate into one of those key subsidiaries that I mentioned earlier. She helped us by automating those elimination reports and doing those things. And we have a really strong team, you know, at the parent level that helps us with the consolidations.
00:30:53
Speaker
That's what set us up for success. I'm a firm believer in that. And as we speak, we're going through an accounting software
Embracing AI in Business Operations
00:31:00
Speaker
transition. So I hope in six months that I can say that those eliminations are working at least just as well as they're working today, but maybe even better.
00:31:11
Speaker
So how much today in this whole boom of ai and these tasks that you can automate and we used to do with spreadsheets, would you say that the company has really leveraged AI to help with this? Or is that something that's still in the infancy and you're working through that?
00:31:28
Speaker
Tell me about that. I would say that's definitely still in the infancy, but I will say we're very forward-thinking and strategic in the fact that most everyone on the team is utilizing AI in some way, shape, or form.
00:31:44
Speaker
I know on my team, people are really utilizing CoPilot. However, the organization has... supported the use of AI. And so we do have an enterprise subscription of ChatGPT.
00:31:56
Speaker
We do have an enterprise subscription of Perplexity. And we allow people to use Copilot as well through our Microsoft 365 subscription. We are really embracing ai and that is one of the things that we're looking to embrace more with this new accounting software because it integrates so well ah with the new accounting software. Copilot does.
00:32:19
Speaker
So I think we'll be able to automate some of our invoicing and those things through the use of Copilot within the accounting software. So really looking forward to that and seeing how that works in the future.
00:32:32
Speaker
But... I'm proud of the organization for being a small private company with not layers and layers and layers of people, you know, seeing everybody be open minded to embracing this change and at least testing it out has been very rewarding.
00:32:50
Speaker
So it's great to hear that. And I'm sure you know everybody says, hey, if you don't leverage AI, you're going to be left behind. So everyone's doing what they can to do that. But to me, this um energy energy industry that you're in, working with accounting and finance,
00:33:08
Speaker
it seems even more complex than your standard business, right? You're dealing with commodity price volatility, royalty structures, regulatory reporting. Are there any new challenges that you just say, hey, this is overwhelming? Or how do you really handle all of these, you know, very diverse, complex um areas?
00:33:31
Speaker
Well, first and foremost, you have a really strong team of people that are willing to constantly pivot and constantly be keeping up to date on everything that we can potentially be exposed to.
00:33:43
Speaker
I will say one of the most unique challenges that I think we're dealing with right now are all the different states that are coming out with the different um ESG laws and greenhouse gas reporting laws.
00:33:54
Speaker
And, you know, we just went through this with the state of California and they finally got to some final regulations. So we're able to report on what the final regulations are, but it took some time to get there.
00:34:06
Speaker
And, you know, New York has come out with some rules now, too. So I think the... I think the most challenging part are the regulatory requirements and how those just continue to evolve and change. And one day the law is in place and the next day the law is overturned.
00:34:25
Speaker
And so as an organization, You're having to go based on the most conservative approach and implement whatever the regulation is. So you're prepared if it doesn't get overturned.
00:34:38
Speaker
But you have no idea what the law even is because the final law isn't there. But they're telling you you need to report by this date. So for from that piece of it, I think that's probably our most challenging piece.
00:34:51
Speaker
So when we were talking a couple of weeks ago, i asked you a question and you gave me a very interesting response. I i asked you, i I asked about your company, United Energy and working there and, you know, is it good? Is it bad? Why do you like it? And you said something along the lines of the accountants that work at United Energy are very hands-on and have a seat at the table.
00:35:15
Speaker
Give me an idea for your specific company. What exactly did you mean by that? You know, I think one of the biggest things that stands out to me as i thought about my answer to you a couple weeks ago and why that is, is just because accounting in the energy industry looks like accounting anywhere else on the surface. I mean, it looks like debits, credits, generally accepted accounting principles, you know, but the economics underneath are so fundamentally different.
00:35:41
Speaker
And so those unique differences drive, you know, accounting treatments and controls and judgment calls that you don't see, or at least you see far less of in most other industries.
00:35:53
Speaker
And so if you think about my team, like, you know, we're not just depreciating desks. We are depreciating assets that are based on units of production accounting because, you know, oil and gas assets are depreciated in a way that we reference as depletion.
00:36:12
Speaker
So we look at our depletion rate of that oil that's coming out of the ground, and that's how we write off those assets that we capitalize on our balance
Accounting's Role in Oil and Gas
00:36:20
Speaker
sheet. And so your depletion rates can change based on commodity prices or reserve valuations.
00:36:28
Speaker
which your reserve valuations are directly related to the price of oil and gas, so your commodity prices. And so, you know, a reserve revision due to pricing isn't just an engineering issue. It becomes an accounting issue.
00:36:42
Speaker
And so because of how unique some of those accounting items are in the energy industry, I'm a firm believer that that's why we have an important seat at the table.
00:36:53
Speaker
The key decision makers in the organization want to know what we're seeing, you know, on the everyday bills that we get. So in oil and gas, the bills that you receive from operators when you're a non-operator are called JIBS, Joint Interest Billing Statements.
00:37:09
Speaker
And so they want to know what we're seeing on those JIBS. You know, do we have an operator that's developing an asset right now in a high price commodity market? Or do we still like, is that same operator still developing when we see oil at that $56 a barrel?
00:37:26
Speaker
And knowing those things, you know, really impact decisions that leadership will make. The only way they can know those things is is if they invite the accountants to have a seat at the table. So it's been really rewarding to be in an organization where we have a seat at the table just because the economics and what we are seeing in the financial statements largely drive the decisions of the business.
00:37:50
Speaker
That's very interesting. And, you know, listening to that answer and listening to something you said earlier, Brings me to my next question about the intersection of accounting in the commodity markets and how quickly conditions can change, whether it's wars between countries or some other transportation snafus that are happening. There's risk involved. There's financial risk. So how do you manage that risk? And when the prices just shoot up without anybody having any notice so quickly, how do you pivot and make sure that the company is protected?
00:38:27
Speaker
So we have a really strong w risk team and that risk team is overseeing all of our operations and also every single trade that our trading desks are making.
00:38:37
Speaker
And we obviously have an internal risk policy and that risk policy is driven by leadership mainly. i mean, we need to know how much risk they're willing to accept. And from there, you know, we can develop a risk policy. And so, you know,
00:38:55
Speaker
When we have a large amount of trades, they're all hedged. So we offset our risk, you know, through hedging and derivatives and those kinds of things. And like our oil and gas production, ah our main focus in that business line has been not to take on any long-term debt because...
00:39:15
Speaker
You never know what commodity prices are going to do, and you can't predict that. And so the best thing to do is just not be over leveraged. And so in our exploration and production unit, we've really focused on no debt, only take on what you can handle and stick to the knitting is what we always say.
00:39:36
Speaker
And it's one of those things where because of that, we've been able to capitalize in both high-priced environments and also low-priced environments because we're in a really strong equity position with that division.
00:39:50
Speaker
I would say, how do we manage risk? We manage risk by being very conservative and not getting out over our skis, so to speak. Excellent. And that that is great advice. It's advice I try to teach my own kids, right? No long-term debt. Nobody likes long-term debt, that's for sure. So let me then pivot away from United Energy for a moment. Let's let's get back to Raina.
00:40:14
Speaker
And something else that I saw um on the CV was the AICPA Leadership Academy. I don't know how many people who are listening know what the AICPA Leadership Academy is, but it's really a great small little group that I was hoping you could just take a couple of minutes and tell ah um tell our audience what that is and what that was what that means to you to be part of it.
00:40:39
Speaker
So the AICPA Leadership Academy is a cohort of individuals that they put together every year to go through a leadership academy.
Insights from Leadership Development
00:40:47
Speaker
And there's a select number of individuals that get selected every year out of an applicant pool.
00:40:53
Speaker
And the year that I was selected, I think there were 34 of us in the cohort, if I'm remembering correctly. You basically apply, go through the application process, get letters of recommendation, those kinds of things. And then once you're selected, you go off-site to a location with your cohort of individuals, and it's a week-long intensive leadership program.
00:41:16
Speaker
And it really gets you away from the desk, so to speak, and gets you... away from the day-to-day work and in a room with like-minded individuals. And I would say the biggest thing that I took away from AICPA Leadership Academy was clarity. You know, clarity around my values, my leadership styles, and how I want to show up as a leader.
00:41:41
Speaker
And it gave me the opportunity to step out of the day-to-day thought process and intentionally think about how I influence people, how decision-making happens, and the broader responsibility that we have as CPAs for the profession as a whole.
00:41:58
Speaker
And just as important of all that was just the peer network you made. i mentioned you're in the room with like-minded individuals. And so being in the room with that level of leader and people that want to advance their career at that level was just such a rewarding experience. And it was a wonderful network of people. All of those individuals from my cohort and i are still in close contact today.
00:42:23
Speaker
And if anyone has an issue or a concern or something, we hit our little group chat up and everybody's there to help. And it's been just a fantastic network of individuals to have in your network.
00:42:39
Speaker
Now, there are a lot of CPAs and accountants out there. So how does AICPA find Raina or find the next person that they want to invite into this leadership academy?
00:42:52
Speaker
So every year they open up the application pool and I found out about it from my state CPA society and they had kind of encouraged me to apply for it.
00:43:04
Speaker
And so from there, i mean, i think that's kind of how the AICPA gets a lot of the information out there is through the state CPA societies or through those of us that have been reaching out to other CPAs in our network.
00:43:19
Speaker
And, you know, encouraging them to apply, helping them maybe with a letter of recommendation and those kinds of things, just because that's kind of how that network is built, I believe.
00:43:30
Speaker
Excellent. Excellent. And since you've done that now and you are talking about the state CPA Society helping you go through the process, seems to me you're giving back now to that state society by becoming a member and sitting on the board of your state society. Is that correct?
00:43:46
Speaker
Yes, that's correct. And which state is that? That's the North Dakota CPA Society. And so i got involved kind of in a unique way, too. So every year at the state CPA convention, the North Dakota CPA Society has a recognition dinner um during that annual convention where they honor all the CPA exam passers from the last year.
00:44:10
Speaker
And there's a little window where they give you information about what your CP requirements will be and also the different committees that they have within the North Coast CPA Society trying to get volunteers for those committees because we all know every good you know, CPE event or conference that goes on takes quite a planning committee to make something like that go on. And so they inform all the new CPAs of what is going on with the society and what the society does to advocate for our profession as a whole.
00:44:42
Speaker
And so and during that event, the year that I was recognized for being an exam passer, the president of the CPA Society at the time was a lady by the name of Michelle Schumacher.
00:44:53
Speaker
And her advice for all of us in the room was to give back to the profession and we'd take more from it than we ever gave. And that statement really stood out to me. Being a first-generation college student in my family and going through the process of college and, you know, filling out scholarship applications and FASA forms and all of those things,
00:45:14
Speaker
you realized like how you relied on a, like a network of mentors because you couldn't go home and ask mom and dad, what did you do during this time? Because they hadn't done it.
00:45:25
Speaker
You know, throughout my years of getting to where I had been at that point in my life, I had had a lot of great mentors along the way. And I wanted to give back to the profession and hopefully give back as much as it had given to me thus far.
00:45:38
Speaker
And that was kind of where I made the pivotal decision that I was going to become active in the North Dakota CPA Society. And it's been a very rewarding experience thus far.
00:45:49
Speaker
And I feel like it's just getting started. Excellent. Excellent. And that that whole giving back kind of ties into another topic that's been hot over the last few years is our overall CPA pipeline, right? We know that it was diminishing for a few years and we're going through changes now, alternate pathways to licensure. And it seems that now the pendulum's swinging back the other way and the pipeline is growing. So is that part of your give back and what you like to do, try to help get more young people into the profession?
00:46:20
Speaker
Yes, it is. and I have been to multiple career fairs alongside the North Dakota CPA Society at different college campuses across the state and, you know, helped students understand what we do as CPAs. It's, you know, we don't always just do tax returns and we don't always sit on audits. And so a lot of times it's Kind of a unique and interesting experience for students to talk to somebody who's out in industry and doing
Community Engagement and Education
00:46:49
Speaker
what I do. You know, it's a much different pace every single day than it is to be in a public accounting firm. And so I try to get to career fairs when I can. i volunteer time the University of Mary here in Bismarck, North Dakota.
00:47:03
Speaker
And I go out and speak to their different classes and tell them a little bit about what I do and, you know, what a what a day in my life looks like. And i just try to give back any way I can. I mean, I know that our state outreach has went as far as the high school level.
00:47:19
Speaker
I have gotten into some high schools and talked to them about what being a CPA means. And we just continue to advocate for the profession. And hopefully that makes a difference and helps with our pipeline issues. It seems like we're getting there. It seems like it's working.
00:47:36
Speaker
Yeah, it really does. And I love that. I'm involved with some high school outreach myself. And that's really where you know we need to just let these young students know how great the profession of accounting is. Because once they go into college, a lot of times they've already made up their minds or they've applied to certain programs and sometimes almost a little too late. So reaching them at that younger age in high school, I think really makes such a huge difference.
00:48:00
Speaker
Now, besides all this volunteer work you do on the state board and your college and high school outreach, things like that, do you do other type of community work or volunteer work to keep yourself busy? Not that you have a lot of free time, but out of curiosity?
00:48:16
Speaker
Yes, I actually do. And so i ah also serve on the board of the Dakota Stage, um which is a community theater here in Bismarck, North Dakota. And I had originally gotten involved in that actually through a professor from the University of Mary.
00:48:31
Speaker
She was stepping down from her her board seat there and they were in need of a CPA to step on to help with some things. And so I agreed to step into that role on that board.
00:48:43
Speaker
I'm involved there. And, you know, other ways that I volunteer, i just I try to find unique needs in the community and just volunteer. So maybe it's a night at the local Dream Center.
00:48:55
Speaker
That's where um that's a location here in Bismarck where they actually serve meals to anyone, but mainly the homeless population. And so just different things like that that can fill your cup in ways other than just the CPA world. But give back to the community however you can.
00:49:13
Speaker
Well, that is great, yes. There's always ah you know soup kitchens and outreach for the homeless. It's very, very noble, and it's so great to hear when people do that. And that's pretty interesting. Dakota Stage Community Theater, do you go out there, you sing and dance, and you perform too, or you just do the accounting?
00:49:29
Speaker
No, you know, when they reached out to me to volunteer on that, I told them I will, I'll come to board meetings and I'll volunteer in the lobby and take tickets and those kinds of things, but don't expect that I'm going to be a performer. And it is kind of a unique situation because I think a lot of their board members have ultimately ended up agreeing to be a performer of some kind, but I was very, very, very honest in the fact that I did not want to be on that stage performing. I would be very quietly behind the scenes or I would be an audience member watching the performers and supporting them that way. But I did not want to get on the stage and perform.
00:50:08
Speaker
All right, so let me just wrap it up with one more question for you. And I really appreciate all this information. it's really, really just amazing stuff that you've shared. But you're looking back now, you've made it all the way up to the top as CFO. But looking back when you were making your decision, you were going into the energy area, maybe on the engineering side, as opposed to accounting and finance. And you've really did a big pivot and you've really gone pretty high up in this industry.
00:50:34
Speaker
If you look at the industry now compared to what you thought it was going to be and you're going to these high schools, do you really give them the advice that, hey, I love the accounting and the finance and this is the good path for you to go in the future? Or do you think AI is going to take it away like so many people are so afraid that, oh my goodness, I'm not going to an accounting job because of AI? What would be the advice that you give to these young students at the high school level?
00:51:01
Speaker
I think my biggest piece of advice that I give them first and foremost is find something that you're passionate about and go after it. You know, the days are long, but the years fly by. And the saying, if you love what you do, you never work a day in your life is very true.
00:51:17
Speaker
And secondly, if they ask me if I was afraid that AI was going to take my accounting and finance job, I would just smile and say, no, I think we're a long ways from that happening. And i think any of us that have actually worked with artificial intelligence and tried to put it to work and really tested its capabilities,
00:51:38
Speaker
we can see that there's a long ways to go. And there are a lot of unique things that have
Impact of AI on Accounting Jobs
00:51:44
Speaker
to go on there. And I mean, right now, it seems like a really pivotal moment in AI.
00:51:50
Speaker
Being somebody who sits in the energy intersection, I question where we're getting all this power. You know, something that nobody's talking about is the lead time on even natural gas turbines. And so there may be plans to add capacity to the power grid, but you have a five-year lead time right now on a natural gas turbine. So, you know, in that amount of time, a lot can change on the technology side too.
00:52:17
Speaker
And I just question, where is all the power coming from to support this AI system? turnover that we're kind of going to. And it seems like mainstream media is starting to pick up on that, too.
00:52:29
Speaker
So I think we have a long ways to go. The moral the story is ah accountants. I think you're always going to need those people to be strategic partners for your business and those people that can think outside the box, but also read the regulation and interpret it for the business in a way that makes sense for that specific business.
00:52:50
Speaker
If you're building a generation asset, you have to think about things completely different than if you're drilling an oil and gas well. And you have to think about things completely different if you're just marketing and trading the products that are produced by that oil and gas well.
00:53:04
Speaker
I think there's just a lot of things to consider where We still need the knowledge of that human being in our office thinking creatively, strategically, but making sure that they understand the accounting regulations behind it and not only the financial reporting regulations, but the tax regulations within that business as well.
00:53:25
Speaker
Well, that's great. That is great. I cannot thank you enough for spending all this time with us today and answering these questions and giving us this information. It's always interesting to talk to people who who are really at a high level within these different industries that a lot of people don't know much about oil and gas. And I'm sure there's been a lot of great information that they've heard from you. And you know it's really just So interesting, your whole background and everything that you've done and your success. So thank you so much for being here, Raina. I really hope that we cross paths again in the future and can maybe have ah another conversation down the road.
00:54:05
Speaker
Yes. Thank you, Mike. I really appreciated being here today and I look forward to maybe coming back. I'd like to thank everyone for listening to today's podcast with Raina Kordnoy.
00:54:18
Speaker
I thought it was really interesting to learn so much about her background as well as the oil and gas industry. I know I definitely learned a few things, but I want to make sure that everyone is aware that you can earn CPE credit just for listening to this podcast. All you need to do, visit the link in the show notes to get your credit.
00:54:37
Speaker
But if you're already a Prime CPE subscriber, better news. You could get this CPE credit at no extra cost. Just log in to finalize your credits.
00:54:48
Speaker
Thanks again for tuning in this week, and we look forward to seeing you in another upcoming Becker Accounting Podcast.