Energy IPO Pace Picks Up

Energy IPO Pace Picks Up
With renewed apparent stability in commodity prices and investor appetite gaining strength, energy companies are looking toward the stock market for investment funds.

After a two-year slump, oil and gas companies appear to be gaining enough confidence to return to the stock market.

Extraction Oil & Gas LLC raised $633 million in the largest initial public offering (IPO) in the U.S. sector this year, and its share price has climbed almost 20 percent since its debut earlier this month. And in September, Noble Energy Inc.’s master limited partnership, Noble Midstream Partners LP, generated $323.4 million with its IPO.

But the market is also eagerly anticipating the IPO of Double Eagle Energy Permian, a private Texas-based oil and gas company that some bankers say could be worth as much as $3 billion. Double Eagle holds more than 63,000 acres in the Permian Basin, one of the most productive U.S. shale plays.

“The door to U.S. oil and gas IPOs appears to be reopening,” said Greg Matlock, Americas Energy Tax Leader at EY, in a research note. “Positive performance by IPO stocks combined with high investor appetite as well as certain other factors could entice more U.S. energy IPOs in the coming weeks and months.”

 One of the main reasons IPOs are emerging is that commodity prices are stabilizing, Matlock said. Relative stability boosts confidence in investors, and the companies filing IPOs have strong assets.

“This renewed IPO market with high-quality execution and capital structures ought to receive positive investor reception, especially in light of the lack of IPOs in this space over the past 19 months,” he said.

Upstream companies with Permian Basin assets – especially those with acreage in the Delaware Basin portion – are expected to perform particularly well, he said.

An award-winning journalist, Deon has reported on energy, business and politics for almost 20 years. Email Deon at deon.daugherty@rigzone.com

WHAT DO YOU THINK?

Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE



Most Popular Articles

From the Career Center
Jobs that may interest you
Oil and Gas job opportunity for "Big 4" Trained Auditors
Expertise: Accounting
Location: Houston, TX
 
Project Manager
Expertise: Project Management
Location: Houston, TX
 
Project Accountant
Expertise: Accounting
Location: Nashville, TN
 
search for more jobs

Brent Crude Oil : $53.89/BBL 1.67%
Light Crude Oil : $50.84/BBL 2.14%
Natural Gas : $3.7/MMBtu 2.77%
Updated in last 24 hours