This Week's Energy IPOs: Approach Resources, OSG America, Quest Energy Partners, SandRidge Energy

There are four energy related IPOs for this week: Approach Resources (AREX), an independent energy company engaged in the exploration, development, exploitation, production and acquisition of unconventional natural gas and oil properties; OSG America (OSP), the largest operator, based on barrel-carrying capacity, of U.S. flag product carriers and barges transporting refined petroleum products.; Quest Energy Partners (QELP), a company that exploits and develops natural gas properties; and SandRidge Energy (SD), an independent natural gas company focused on West Texas.

All quotations are from the companies' most recent S-1 filings with links provided.

APPROACH RESOURCES (AREX)
Business Overview (from prospectus)

We are an independent energy company engaged in the exploration, development, exploitation, production and acquisition of unconventional natural gas and oil properties. Our principal operations are located in the Ozona Northeast field in West Texas, where we originally acquired approximately 28,000 gross (27,000 net) acres of leasehold interests in 2004. Since that time, through a series of strategic leasehold acquisitions, we have increased our West Texas acreage to 66,500 gross (51,700 net) acres located in the Ozona Northeast field and our nearby Cinco Terry project. Our management team has extensive experience finding and exploiting unconventional reservoirs, particularly tight gas sands like Ozona Northeast, by applying advanced completion, fracturing and drilling techniques. Substantially all of our growth has been through our own drilling efforts. Since 2004, we have added approximately 149 Bcfe of proved gas and oil reserves from unconventional reservoir formations.

Offering: 7.7 million shares at $14.00 - $16.00 per share. Net proceeds of approximately $76.9 million will be used to repay debt.

Lead Underwriters: J.P. Morgan, Wachovia Securities

Financial Highlights:

Oil and gas sales increased $3.4 million, or 7.9%, for the year ended December 31, 2006 to $46.7 million from $43.3 million for the year ended December 31, 2005... Our lease operating expenses increased $1.0 million, or 33.7%, for the year ended December 31, 2006 to $3.9 million from $2.9 million for the year ended December 31, 2005... Our interest expense increased $3.0 million, or 375%, to $3.8 million for the year ended December 31, 2006 from $802,000 for the year ended December 31, 2005.

Additional Resources:

• Company website
• Online road show
• IPOScoop.com

OSG AMERICA (OSP)
Business Overview (from prospectus)

We are the largest operator, based on barrel-carrying capacity, of U.S. flag product carriers and barges transporting refined petroleum products. We were recently formed by Overseas Shipholding Group, Inc. (NYSE: OSG), a market leader in providing global energy transportation services. We plan to use the expertise, customer base and reputation of OSG to expand our marine transportation service. Following this offering, our initial fleet of product carriers and barges will consist of ten product carriers, seven articulated tug barges (ATBs) and one conventional tug-barge unit [CTB], with an aggregate carrying capacity of approximately 4.9 million barrels. Alaska Tanker Company, LLC [ATC], a joint venture in which we have a 37.5% ownership interest, transports crude oil from Alaska to the continental United States using a fleet of five crude-oil tankers with an aggregate carrying capacity of 6.3 million barrels. Upon the completion of this offering, OSG will own a 75.5% interest in us, including a 2% interest through our general partner, which OSG owns and controls.

Offering: 7.5 million shares at $19.00 - $21.00 per share. Net proceeds of approximately $136.5 million will be used to reimburse the parent company for approximately $136.5 million of capital expenditures incurred in the 24 months prior to the offering.

Lead Underwriters: Citi, UBS Investment Bank

Financial Highlights:

During the six months ended June 30, 2007, TCE revenues increased $50,821,000, or 152%, to $84,256,000 from $33,435,000 for the six months ended June 30, 2006... Vessel expenses increased by $22,919,000 to $36,112,000 during the six months ended June 30, 2007 from $13,193,000 for the six months ended June 30, 2006... Net cash flow from operating activities increased to $21.5 million for the six months ended June 30, 2007, from $2.5 million for the same period in 2006.

Additional Resources:

• Company website
• AP: 'OSG America Sets Price Range of IPO'
• Tampa Bay Business Journal: 'OSG America to IPO a piece of itself, remains keen on Tampa'

QUEST ENERGY PARTNERS, L.P. (QELP)
Business Overview (from prospectus)

We are a Delaware limited partnership formed in July 2007 by our Parent, Quest Resource Corporation, to acquire, exploit and develop oil and natural gas properties. Our primary business objective is to generate stable cash flows allowing us to make quarterly cash distributions to our unitholders at our initial distribution rate and, over time, to increase our quarterly cash distributions. We intend to pay holders of our common units distributions of available cash of $0.40 per unit for each quarter, or $1.60 per unit annually, before we pay any distributions to holders of our subordinated units. Our operations are currently focused on the development of coal bed methane, or CBM, in a 13-county region in southeastern Kansas and northeastern Oklahoma, referred to in this prospectus as the “Cherokee Basin.” In addition to our producing properties, we have a significant inventory of potential drilling locations and acreage in the Cherokee Basin that we believe will allow us to grow our reserves and production over time.

Offering:8.8 million shares at $19.00 - $21.00 per share. Net proceeds of approximately $161.3 million will be used to repay debt.

Lead Underwriters: Wachovia Securities, RBC Capital Markets

Financial Highlights:

Oil and gas sales were $53.4 million for the six months ended June 30, 2007 compared to $33.8 million for the six months ended June 30, 2006, an increase of $19.6 million, or 58.1%... Operating expenses, which consist of oil and gas production costs and transportation expense, were $28.1 million for the six months ended June 30, 2007 as compared to $13.7 million for the six months ended June 30, 2006, an increase of $14.4 million, or 104.8%... General and administrative expenses increased from $3.2 million for the six months ended June 30, 2006 to $5.8 million for the six months ended June 30, 2007, an increase of $2.6 million, or 81.9%.

Additional Resources:

• Online road show
• Press Release: 'Quest Energy Partners, L.P. Announces Commencement of Initial Public Offering'

SANDRIDGE ENERGY (SD)
Business Overview (from prospectus)

SandRidge is a rapidly growing independent natural gas and oil company concentrating in exploration, development and production activities. We are focused on expanding our continuing exploration and exploitation of our significant holdings in an area of West Texas that we refer to as the West Texas Overthrust, or “WTO,” a natural gas prone geological region where we have operated since 1986 that includes the Piñon Field and our South Sabino and Big Canyon prospects. We intend to add to our existing reserve and production base in this area by increasing our development drilling activities in the Piñon Field and our exploration program in other prospects that we have identified. As a result of our 2006 acquisitions, including the NEG acquisition described below, we have nearly tripled our net acreage position in the WTO since January 2006. We believe that we are the largest operator and producer in the WTO and have assembled the largest acreage position in the area. We also operate significant interests in the Cotton Valley Trend in East Texas, the Gulf Coast area, the Gulf of Mexico and the Piceance Basin of Colorado.

Offering:26.0 million shares at $22.00 - $24.00 per share. Net proceeds of approximately $565.4 million will be used to repay debt.

Lead Underwriters: Lehman Brothers, Goldman Sachs

Financial Highlights:

Total revenue increased to $388.2 million in 2006 from $287.7 million in 2005... Total operating costs and expenses increased $97.6 million to $351.3 million in 2006 from $253.6 million in 2005.. Production expense increased to $35.1 million in 2006 from $16.2 million in 2005... General and administrative expense increased $43.7 million to $55.6 million in 2006 from $11.9 million in 2005.

Additional Resources:

• Company website
• Online road show
• NewsOK.com: '2 state energy firms to launch IPOs'