Extraction Oil & Gas (XOG) became the first exploration and production company to go public in two years and rallied in its trading debut Wednesday after pricing above its expected range late Tuesday.
Extraction raised net proceeds of $594.1 million after offering 33.3 million shares, priced at 19 each vs. the 15-18 range forecast. Extraction is based in Denver with operations in the Denver-Julesburg Basin.
Its top shareholders include Yorktown Energy partners, a private equity and venture capital firm specializing in the energy markets, as well as asset managers Och-Ziff and BlackRock (BLK), according to an SEC filing.
Extraction shares closed up 15% at 21.85 on the stock market today, off intraday highs.
Independence Contract Drilling ICD was the last E&P company to go public, back in August 2014. Centennial Resource Production, an independent E&P in the Southern Delaware Basin, filed for a $100 million IPO in July but was then bought out by Silver Run Acquisition Corporation (SRAQ).
Meanwhile, oilfield services provider Mammoth Energy Services (TUSK) is looking to raise $128 million, offering 7.75 million shares at a price range of 15-18. It will price Thursday and debut Friday, trading on the Nasdaq under the ticker TUSK.
IBD’s TAKE: IPOs in the energy sector have been slow since the oil price crash, but there have been plenty of IPO winners this year including Acacia Communications and Twilio.
Extraction’s IPO tested investors’ appetite for energy shares as U.S. oil prices hover near year highs but also at a level that has acted as a ceiling this year. Some analysts have predicted prices will head back down, unless OPEC can hammer out a credible plan to cut production next month.
It also competed for dollars with other shale producers like Diamondback Energy (FANG), Pioneer Natural Resources (PXD) and Oasis Petroleum (OAS), who have issued new shares and debt to help raise capital as traditional lenders turned squeamish on the sector when oil prices tanked earlier.
The other energy-related debut Wednesday is Azure Power (AZRE). The Indian low-cost solar power producer priced 3.41 million shares at 18, below the expected 21-23 range, and was down 17% at 14.89.
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