Fast Out of the Gate, Oil and Gas OFS IPO Companies Look To Grow

Fast Out of the Gate, Oil and Gas OFS IPO Companies Look To Grow
Newly public oilfield service companies, buoyed by strong balance sheets, look to devour weak rivals in the space, say experts at the Louisiana Energy Conference in New Orleans.

This year, the biggest players in the oilfield services space appear to be working with what they’ve already got in their portfolio. Rather, it’s the upstart IPOs that are hungry to grow by devouring rivals through mergers and acquisitions (M&A).

“Halliburton, Schlumberger, Baker Hughes (expected to complete its merger with GE Oil & Gas this year) and Weatherford … We see the bigger players not being as acquisitive as they once were,” said Bruce Ross, managing partner at OFS Energy Fund in Houston.

But about half a dozen oilfield service companies that filed an initial public offerings (IPO) this year, such as Kayne Anderson Acquisition Corp. and Mammoth Energy Services Inc., balanced their bottom lines and have money to spend, he told the Louisiana Energy Conference on June 1.

“(They) accessed public equity, paid their bank debt down to zero, and in some cases, have actually sourced enough equity to put cash on the balance sheet,” Ross said. “That group of entities probably have a market cap of $1 billion to $1.5 billion and are extremely acquisitive.”


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