Vine Energy (NYSE:VEI) stock is set to start trading today as the Texas-based shale company launches its initial public offering (IPO) on Thursday.
Vine Energy is an energy company based out of Plano, Texas. Its main focus is on the development of natural gas properties. This includes locations in the “stacked Haynesville and Mid-Bossier shale plays in the Haynesville Basin of Northwest Louisiana.”
Now that we know what Vice Energy’s business is, let’s take a look at its IPO.
- The Vine Energy IPO has the company listing shares of VEI stock on the New York Stock Exchange.
- This has it listing 21.5 million shares.
- There’s also a 30-day option for underwriters of the IPO to purchase an additional 3.225 million shares at the launch price.
- Vine Energy notes that it expected the deal to set it up with $280.8 million in net proceeds.
- According to Bloomberg, Vine Energy was looking to generate $361 million from the IPO and only got $301 million.
- The company plans to use the funds from the offering to pay off all of the debt belonging to its various subsidiaries.
- It says any money left over after this will go toward general corporate purposes.
- The joint book-running managers for the Vine Energy IPO are Citigroup (NYSE:C), Credit Suisse (NYSE:CS), Morgan Stanley (NYSE:MS), Barclays (NYSE:BCS), Bank of America (NYSE:BAC) Securities and RBC Capital Markets.
- Investors should also know that this is the first IPO for a U.S. shale drilling company in four years.
Ed Hirs, an economics professor and energy market expert, said the following to Bloomberg about the Vine Energy IPO.
“Vine being able to complete the IPO, that in itself is a victory. The U.S. shale plays have not had any returns over the past 10 years. Vine was swimming upstream.”
Vine Energy is joining an already packed market filled with rivals in the energy sector. Let’s take a look at some recent news from its competition.
Energy companies that have been in the news of late include iShares Global Clean Energy ETF (NASDAQ:ICLN), Cabot Oil & Gas (NYSE:COG), BP (NYSE:BP), and others. Investors looking for more information on them can find a wealth of content on InvestorPlace.com.
More on Energy Stocks
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.