Oct 12 Shares of Extraction Oil & Gas Inc
- the first producer to launch a U.S. IPO this year -
rose as much as 19.7 percent in their market debut as crude
prices held above $50 per barrel.
Denver-based Extraction Oil priced its offering of 33.33
million shares at $19 each, above the expected range of $15-$18,
to raise about $633 million.
The shares hit a high of $22.75 in early trading on
Wednesday, valuing the company at about $3.23 billion.
Many oil and gas companies held off on initial public
offerings this year, discouraged by weak crude prices. However,
the outlook for oil has improved in the past two weeks following
a proposal by OPEC to curb production.
Several other oil and gas companies plan IPOs, people
familiar with the matter have told Reuters, encouraged by oil's
recovery from a 12-year low around $30 per barrel in January.
"The recent uptick in energy IPO-related activity may be an
indication that market is recognizing that crude prices have
stabilized and a new normal is being established in a range
around $50 a barrel," said Joe Dunleavy, head of PwC's U.S.
energy sector capital markets business.
Oilfield services provider Mammoth Energy Services Inc is
expected to price an IPO on Thursday, aiming to raise as much
$140 million. The IPO could value the company at $675 million.
Extraction Oil, founded by Mark Erickson and Matthew Owens
in 2012, is backed by Yorktown Partners LLC, BlackRock Inc
and Neuberger Berman Group, among others.
Yorktown retains about 36 percent stake following the IPO.
The private equity firm had just over 50 percent of voting
rights prior to the offering.
Extraction Oil's revenue rose 19.1 percent to $110.5 million
in six months ended June 30, but its net loss widened to $173.13
million from $56.7 million.
The company said it produced a net 37,328 barrels of oil
equivalent per day in July.
Credit Suisse, Barclays Capital and Goldman Sachs were among
the underwriters to the offering.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Ted Kerr)