Signs of some strengthening in midstream capital markets were reinforced by the spin-off of BP Midstream Partners LP (NYSE: BPMP) from its integrated parent. However, even a top-tier issuer like BP encountered market resistance, with BP Midstream pricing its IPO at $18 per common unit, down from an expected initial offering price of $19 to $21 per unit.
BP Midstream issued 42.5 million shares at the reduced price, resulting in 40.6% of limited partner interests in the MLP being held in public hands. BP Midstream realized gross proceeds of $65 million from the offering. If the overallotment option is exercised in full, 46.7% of limited partner interests would be held by the public.
By way of a special purpose acquisition company (SPAC), Sentinel Energy Services Inc. (NASDAQ: STNLU), also went public, pricing 30 million units at a price of $10 per unit. Sentinel is led by chairman Andrew Gould, previously CEO of Schlumberger Ltd. (NYSE: SLB), and CEO Krishna Shivram, formerly CEO of Weatherford International. Proceeds will be used to consummate an initial business combination.
In follow-on offerings, Denver-based SRCI Energy Inc. (NYSE: SRCI) issued 35 million shares at $8 each, a discount from the prior day close of $9.07. Gross proceeds of about $280 million, or roughly $322 million with the full overallotment, are to finance part of the purchase from Noble Energy Inc. (NYSE: NBL) of 30,200 net acres adjacent to the company’s existing acreage in Weld County in Wattenberg Field.
Given cash consideration of $568 million for the assets, SRCI Energy also announced a private offering of $550 million of senior unsecured notes due November 2025. Proceeds are to be used to help fund the acquisition, for general corporate purposes and the redemption or repurchase of its existing 9% senior notes due 2021.
Earthstone Energy Inc. (NYSE: ESTE), based in The Woodlands, Texas, priced an offering of 4.5 million shares of its Class A common stock at $9.25 each for total net proceeds of approximately $39.2 million. Proceeds are earmarked for repaying outstanding indebtedness under the company’s revolving credit facility.
Recommended Reading
Tidewater Sells Canadian Roadway Network for CA$24MM
2025-03-06 - Canadian midstream company Tidewater Midstream and Infrastructure plans to use proceeds to pay down debt.
Plains’ $725MM in Deals Add Eagle Ford, Permian Infrastructure
2025-01-08 - Plains All American Pipeline’s executed transactions with EnCap Flatrock Midstream in the Eagle Ford and Medallion Midstream in the Delaware Basin, among other moves.
Western Midstream to Build Permian Produced Water Pipeline
2025-02-26 - Western Midstream is investing up to $450 million to expand its produced water infrastructure, including the Pathfinder pipeline to transport produced water to disposal facilities in the Delaware Basin.
The Wall: Uinta, Green River Gas Fills West Coast Supply Gaps
2025-03-05 - Gas demand is rising in the western U.S., and Uinta and Green River producers have ample supply and takeaway capacity.
ONEOK Names Two New Executive Leaders Following Asset Sale
2025-01-06 - Randy Lentz and Sheridan Swords are both stepping into newly created executive leadership roles for ONEOK.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.