Power plays are back in style. Two big oil and gas IPOs – BKV Corp. (BKV proposed) and TXO Energy Partners (TXO proposed) – slid into the IPO pipeline in the past week. Each is estimated at $100 million. The timing was perfect – in sync with icy temperatures across much of the U.S., a record snowstorm that floored even Buffalo, and rising natural gas futures prices. Those new filings gave IPO investors reasons to hope for some promising action in the next few weeks before 2022 fades to black.
“We’ll see maybe two or three more (playable) deals before we’re done,” a seasoned IPO trader says, looking at the stretch between the week after Thanksgiving and mid-December, when the IPO market traditionally takes a holiday break until the second week of January or so. “Bankers will probably price them right – just to get them out the door.”
The snap, crackle and pop of oil and gas deals landing on the IPO Calendar is a throwback to 2015. Flip the calendar back seven years to a time when natural gas limited partnerships were an IPO trend. Tallgrass Energy GP, LP (TEGP) and EQT GP Holdings, LP (EQGP) went public in May 2015 – following crude oil’s climb above $60 a barrel for the first time since December 2014. The first IPO from the natural gas sector in 2015 was Columbia Pipeline Partners LP (CPPL).
The IPO Pipeline is the talk of the town during this short holiday week. The U.S. stock market will be closed on Thursday, Nov. 24, 2022, for Thanksgiving. On Friday, Nov. 25th, the New York Stock Exchange and the NASDAQ will close early – at 1 p.m. EST. Just one small-cap IPO – Adamas One Corp. (JEWL proposed) – is scheduled for pricing this week, along with the micro-cap NASDAQ uplisting and public offering of Marizyme Inc. (MRZM proposed).
A third big IPO filing – Skyward Specialty Insurance Group Inc. (SKWD proposed) – crossed the SEC’s bow last week. Skyward’s IPO is pegged at $100 million as well. The company offers commercial property and casualty insurance, group accident and health, professional liability and workers’ compensation insurance, the prospectus says.
Two more big names – KinderCare Learning Companies Inc. (KLC proposed) and Savers Value Village, Inc. (SVV proposed) – updated their SEC filings last week. No terms were filed, though. KinderCare is the largest U.S. private chain of early childhood daycare and education centers. KinderCare resurrected its IPO in March with a blank filing. A year ago, KinderCare postponed its IPO; that deal was expected to raise $503 million. Savers Value Village is the largest for-profit thrift store operator in the U.S. and Canada with more than 300 stores under five different banners. The company sells secondhand clothing, shoes, accessories and home goods.
Banking on Energy
The energy sector’s presence in the IPO Pipeline is significant. In addition to newcomers BKV Corp. (BKV proposed) and TXO Energy Partners (TXO proposed), the pipeline includes:
- Bounty Minerals, Inc., (BNTY proposed), which owns natural gas mineral interests in the Appalachian Basin. (S-1 filing dated Nov. 9, 2022) and
- MN8 Energy, Inc. (MNX proposed), formerly known as Goldman Sachs Renewable Power LLC. (S-1 filing dated Sept. 12, 2022).
Bounty Minerals and MN8 Energy are profitable. Both are NYSE listings. Estimated IPO proceeds for each deal: $100.0 million.
BKV Corp. is not profitable, reporting a net loss of $51.1 million on revenue of $953 million for the last 12 months, according to the prospectus.
In contrast, TXO Energy Partners, L.P., formerly known as MorningStar Partners – is in the black with $56.49 million in net income on $343.78 million in revenue for the last 12 months, the prospectus says.
“As forecasts over the weekend teased a colder Lower 48 pattern during the first week of December, natural gas futures rallied in early trading Monday. The December Nymex contract was up 14.1 cents to $6.444/MMBtu at around 8:45 a.m. ET. January was up 16.5 cents to $6.881,” Jeremiah Shelor reported early today (Monday, Nov. 21, 2022) in his NYMEX gas futures market commentary for Natural Gas Intelligence.
The opposite winds were blowing in the crude oil futures market. Global benchmark Brent crude oil fell below $83 a barrel, the lowest since January, Bloomberg reported at around 11 a.m. EST today (Monday, Nov. 21, 2022).
“Declines accelerated after the Wall Street Journal reported OPEC+ is considering an output increase of 500,000 barrels ahead of the EU’s embargo of Russian oil,” Julia Fanzeres reported for Bloomberg in her crude oil futures market commentary published online today at 11:15 a.m. EST (Monday, Nov. 21, 2022).
Worth noting: The Ultra Bloomberg Natural Gas ETF (BOIL) is up 14.1 percent, according to a Zacks report released around 8:30 a.m. EST today – visible on NASDAQ’s website.
Meanwhile, traffic was slow at the SEC’s filing window today. That’s not surprising, with many on Wall Street in countdown mode ahead of the Thanksgiving holiday.
Note: Never trade on proposed symbols. They have been known to change and you might buy something on the OTC Bulletin Board.
To see what time the NASDAQ IPOs are expected to trade, please log in to: NASDAQTrader.com then scroll down to IPO Message.
Disclosure: Nobody on the IPOScoop.com staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The IPOScoop.com staff does not issue advice, recommendations or opinions.
Disclaimer: A SCOOP Rating (Wall Street Consensus of Opening-day Premiums) is a general consensus taken, at press time, from Wall Street and investment professionals concerning how well an IPO might perform when it starts trading. The SCOOP Rating does not reflect the opinions of anyone associated with IPOScoop.com. The SCOOP ratings should not be taken as investment advice. The rating merely reflects the opinion of the professionals at the time of publication and is subject to last-minute changes due to market conditions, changes in a specific offering and other factors, such as changes in the proposed offering terms and the shifting of investor interest in the IPO. The information offered is taken from sources we believe to be reliable, but we cannot guarantee the accuracy.