Extraction Climbs in Debut of 2016’s Biggest U.S. Energy IPOby
Extraction Oil & Gas LLC climbed in its trading debut after raising the biggest initial public offering in the U.S. energy industry this year.
Extraction climbed 17 percent to $22.30 a share at 10:44 a.m. in New York. The Denver-based company raised $633 million by selling 33.3 million shares for $19 apiece, above the top end of the marketed range, according to data compiled by Bloomberg. Extraction had offered the shares for $15 to $18 apiece.
Just two other energy companies have tapped public markets in 2016, as battered oil prices pressure the entire industry. Oil slipped on Wednesday on speculation an OPEC agreement to trim crude output won’t succeed in reducing supply.
Noble Midstream Partners LP, the master-limited partnership of Noble Energy Inc., raised $323.4 million in its September IPO, including an overallotment. Wind-blade maker TPI Composites Inc. sold $79.1 million in stock in July. Both have climbed more than 25 percent from their offering prices.
Extraction acquires and develops oil, natural gas and natural gas liquid reserves in Colorado’s Denver-Julesburg Basin. As of June, the company had about 100,000 net acres in the Wattenberg Field -- in addition to 124,000 net acres elsewhere in the DJ Basin. It operates two rigs, with a plan to add a third by mid-2017.
The company posted pro forma revenue of 214.3 million in 2015, with a net loss of $14.8 million. In the six months ended June 30, Extraction posted sales of $138.8 million and a loss of $99.7 million.
Extraction plans to use most of the proceeds to repay its revolving credit facility, according to its prospectus.
Shares are listed on the Nasdaq Stock Market under the symbol XOG. Credit Suisse Group AG, Barclays Plc, Goldman Sachs Group Inc. and Citigroup Inc. led the deal.