While many companies pushed back plans to launch deals amid extreme market volatility last week, filing activity showed no signs of a slow-down with six new IPOs filing initial S-1's with the SEC on Friday, including three energy companies. So far this year, 17 IPOs have priced in the energy sector, compared to 18 in all of 2010. The US IPO pipeline now includes 16 energy companies (9% of total IPOs) expected to generate nearly $4 billion in proceeds. This robust pipeline may make 2011 the most active year in a decade for the energy sector, matching peaks in 2006 and 2007 when 34 and 32 energy IPOs priced, respectively.
Rose Rock Midstream (RRMS), a limited partnership recently formed by SemGroup to own and acquire midstream energy assets in the western US, plans to raise up to $181 million in its offering. The Tulsa, OK-based company, which was founded in 2011, booked $239 million in sales for the 12 months ended March 31, 2011. Barclays Capital is the lead underwriter on the deal.
Matador Resources (MTDR), an independent energy company with a focus on unconventional natural gas exploration and production, plans to raise up to $150 million in its offering. The recent successful IPO of C&J Energy (CJES) and the acquisition of Great White Energy show interest in unconventional oil and gas drilling. The Dallas, TX-based company, which was founded in 2003, booked $41 million in sales for the 12 months ended March 31, 2011. RBC Capital Markets and Citigroup are the lead underwriters on the deal.
Mid-Con Energy Partners (MCEP), an owner, operator, and developer of primarily oil properties in the central United States, plans to raise up to $140 million in its offering. The Tulsa, OK-based company, which was founded in 2011, booked $25 million in sales for the 12 months ended June 30, 2011. RBC Capital Markets is the lead underwriter on the deal.
Also on Friday, LRR Energy (LRE), an LP formed by Lime Rock Resources to operate oil and gas properties, filed an amendment to its S-1 updating its financials for the June quarter.
Oil and gas stocks were among the biggest gainers as the markets rallied on Monday, with the S&P 500's energy sector up 3%, while crude oil futures rose nearly 3%. The market has proven receptive to energy LPs (AMID, OILT, GSJK, NGL, TLLP, GMLP) and trusts (PER, VOC, SDT) and several have traded well because of investor demand for yield. The Alerian MLP Index is down -1% YTD (vs. -4% for the S&P 500), and down -3% since the beginning of June (vs. -10% for the S&P 500).