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Sundance Energy Leads a Lonely Week for IPOs

A strong 2014 for offerings takes a short break


If you’re worried about the lonely IPO in the pipeline for this week, don’t — there’s nothing wrong with the market. It’s just the dealmakers taking a little President’s Day break … for the week.

Looking at the year so far, the IPO market has remained robust amid a glut of volatility on the NYSE and Nasdaq. Sticking out the most amid the dealmaking has been biotech operators, which has included big-time winners like Dicerna (DRNA), which is up 160%, or Ultragenyx (RARE), which has gained 110%.

But we should see deals diversify over the next few months. For example, Box (a top cloud-based storage company) is expected to hit the markets, as well as King, maker of the Candy Crush Saga mobile game.

As for the lone IPO this week, we’re looking at Sundance Energy Australia (SNDE), which is an oil and natural gas exploration and production company. Sundance has focus on North America, with nice holdings in hot spots like the Eagle Ford formation, north-central Oklahoma targeting the Mississippian and Woodford formations, the Wattenberg field in central Colorado targeting the Codell and Niobrara formations and northwest North Dakota targeting the Bakken and Three Forks formations in the Williston Basin.

However, the company has shifted its strategy in past years and taken operational control of its ownership interests. To do this, the company has sold off a variety of properties like the South Antelope field of the Williston Basin.

Growth has been robust for Sundance. For the first nine months of 2013, revenues came to $50.5 million, up from $26.9 million in the same period a year ago. During this period, the adjusted EBITDA increased from $17.9 million to $27.9 million.

Sundance also has ambitious plans for 2014. For example, SNDE expects to ramp its capital budget to $409 million, up from $226 million in the same period a year ago. No doubt, the upcoming IPO will be critical for this.

According to the S-1 filing, Sundance plans to issue 7.8 million shares on the Nasdaq under the ticker SNDE at a range of $16.50 to $18.50 and the lead underwriters include Wells Fargo Securities (WFC), Canaccord Genuity and UBS Investment Bank (UBS).

The company already trades on the Australian Securities Exchange.

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO StrategiesAll About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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