• 4 minutes Will We Ever See 100$+ OIL?
  • 8 minutes Iran downs US drone. No military response . . Just Destroy their economy. Can Senator Kerry be tried for aiding enemy ?
  • 11 minutes Energy Outlook for Renewables. Pie in the sky or real?
  • 1 hour Iran Loses $130,000,000 Oil Revenue Every Day They Continue Their Games . . . .Opportunity Lost . . . Will Never Get It Back. . . . . LOL .
  • 15 mins Renewables provided only about 4% of total global energy needs in 2018
  • 3 hours Berkeley becomes first U.S. city to ban natural gas in new homes
  • 2 days Iran Captures British Tanker sailing through Straits of Hormuz
  • 1 day EIA Reports Are Fraudulent : EIA Is Conspiring With Trump To Keep Oil Prices Low
  • 13 hours Shale Oil will it self destruct?
  • 1 hour Today in Energy
  • 3 days Drone For Drone = War: What is next in the U.S. - Iran the Gulf Episode
  • 2 days Oil Rises After Iran Says It Seized Foreign Tanker In Gulf
  • 9 hours So You Think We’re Reducing Fossil Fuel? — Think Again
  • 3 hours N.Y. Governor Signs Climate Bill
  • 2 hours First limpet mines . . . . now fly a drone at low altitude directly at U.S. Navy ship. Think Iran wanted it taken out ? Maybe ? YES
  • 3 days LA Solar Power/Storage Contract
  • 19 hours U.S. Administration Moves To End Asylum Protections For Central Americans
Alt Text

Is A Crude Glut Looming?

Slowing global economic growth is…

Alt Text

Oil & Gas Discoveries Rise In High-Risk Oil Frontiers

Global discoveries of conventional oil…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Oil And Gas IPOs Return Amid Oil Price Recovery

The oil price crash has left energy companies scrambling to shore up balance sheets and streamline costs. But the recent recovery of crude prices has instilled cautious confidence among oil and gas firms that they might be able to raise capital for expansion via initial public offerings (IPOs).

After two years of near zero activity in the energy IPO market, new research by Simmons & Co has shown that there are plans for more than 20 oil and gas share listings, The Street reports.

With the price of oil holding above US$50 for more than three months now, it looks like institutional investors and private equity firms believe the time has come to return to financing growth in the oil and gas sector, which has had a rough two years in the downturn.

It took the industry two years and two months to see the first exploration and production (E&P) IPO since the start of the price slump – with Extraction Oil & Gas going public in October last year. This was the first such transaction since Independence Contract Drilling launched its IPO in August 2014.

Extraction Oil & Gas’ IPO was followed the a month later by that of WildHorse Resource Development Corp, an independent oil and gas field operator focused on the Eagle Ford shale play in Texas.

Other oil and gas, oilfield services and energy companies also followed suit in a sign that the industry is returning to the stock market hoping for high valuation of its assets.

“Investor response was cautiously discerning, yet encouraging,” investment bank GulfStar Group said in its Energy Outlook 2017, noting that it expects other private equity-backed companies to launch IPOs in the first half of this year.

The first IPO on the NYSE this year was one of an oilfield services company—Keane Group—whose shares started trading on January 20. Jagged Peak Energy, an independent oil and natural gas company focused on the acquisition and development of unconventional oil and associated liquids-rich natural gas reserves in the Southern Delaware sub-basin of the Permian, launched its IPO on January 27 and said it would be using part of the net proceeds to finance a portion of its 2017 capital program. Kimbell Royalty Partners followed in February. Kimbell Royalty Partners is an oil and gas mineral and royalty limited partnership, which owns acreage in major U.S. onshore basins, including more than 29,000 wells in the Permian.

Out of the 16 IPOs on the New York Stock Exchange so far this year, 25 percent, or 4 IPOs, were launched by energy companies, IPO Boutique’s 2017 IPO Industry Breakdown shows.

Those were Keane Group, Jagged Peak Energy, Kimbell Royalty Partners, and Ramaco Resources – a coal company with mines in West Virginia, Virginia and Pennsylvania.

And more IPOs are in the works, according to analysts.

Companies outside the U.S. are also seeking access to the stock market. Canada may see its biggest oil and gas IPO in more than two years. Fracking solutions provider STEP Energy Services last month filed a prospectus seeking an IPO. According to Bloomberg, STEP Energy Services – which is seeking to raise US$149.3 million (C$200 million) – could be the largest IPO in the Canadian oil and gas industry since Seven Generations Energy raised US$695.7 million (C$932 million) back in October 2014.

According to GulfStar Group’s energy outlook for this year, the resurgence of capital markets and M&A activity point to a gradual return of risk appetite that had been largely unseen in the industry for more than two years. The three main drivers for improved industry conditions this year would be commodity price stability, higher efficiency, and rising global energy demand, GulfStar reckons.

So, judging from the return of IPO activity, after more than two years of depressed oil prices and industry outlooks, the energy sector, oil and gas in particular, is growing cautiously optimistic that the worst of the downturn is over.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play