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U.S. E&Ps, OFS Privates Eyeing IPO Advantage

Buoyed by a surge in activity, privately held oil and gas explorers and oilfield service providers that serve customers in North America's onshore are growing confident of publicly launching their companies.

Blank check energy company Vantage Energy Acquisition Corp., which began trading Tuesday, priced its initial public offering (IPO) at $10/unit for 48 million units, ahead of initial expectations to sell 40 million units. The Irving, TX-based exploration operator, a portfolio company of NGP XI, trades on Nasdaq under "VEACU."

Vantage is looking for a "merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses," according to a filing with the Securities and Exchange Commission (SEC).

Financial backer NGP, also based in Irving, has invested in several high profile upstream and midstream operators, including Permian Basin-focused Centennial Resources Development Inc., Eclipse Midstream LP, EnLink Midstream, Triangle Petroleum Corp. and White Oak Energy. The IPO market for U.S. oil and gas has been improving for months.

Last fall, Denver-based onshore expert Extraction Oil & Gas LLC launched its offering and now is touting its production growth from the Wattenberg field. In late March, Houston-based Silver Run Acquisition Corp. II, a special purpose entity sponsored by a Riverstone Holdings LLC affiliate, completed a record-breaking IPO for $1.035 billion gross. In December NGP-backed WildHorse Resource Development Corp. raised close to $400 million in its launch.

Vantage said it plans to focus on "businesses and/or assets in the upstream and midstream energy sectors, principally in North America," which specifically focus on opportunities "where our chief executive officer's networks and experience are suited."

Vantage CEO Roger E. Biemans was overseeing a staff of four as of April 3, according to the SEC filing. The former Encana Corp. executive, who at one time ran the U.S. arm, co-founded Vantage Energy Inc. and other entities. Vantage previously had attempted and withdrawn IPO plans at least twice before it was acquired last fall by Rice Energy.

Readying to launch an IPO is Hess Corp., which last month said it would spin off Bakken Shale-focused Hess Midstream Partners LP.

Blank check companies, also known as special purpose entities, use stock offerings to raise cash before they prowl for acquisitions. In the past, many blank check offerings were overseen by hedge funds.

Oklahoma City-based Tapstone Energy LLC, backed by Blackstone Group LP and helmed by former Chesapeake Energy Corp. executive Steven C. Dixon, filed with the SEC on Thursday initially to raise up to $100 million.

The company, founded in 2013, last year booked $189 million in sales. It concentrates its exploration efforts in the stacked reservoirs of the Anadarko Basin in Oklahoma, Texas and Kansas. Tapstone, whose shares would be listed on the NYSE under "TE," did not disclose pricing terms.

Also planning an IPO is Vine Resources, a natural gas-focused private that operates in the Haynesville Shale, which filed last Monday to raise up to $500 million.

The Plano, TX-based Vine, formed in 2014, booked $104 million in sales during 2016. It plans to list on the New York Stock Exchange (NYSE) under "VRI."

Also anticipating a public offering is Liberty Oilfield Services. Once launched, the stock would be listed on the NYSE under "BDFC."

The privately held pressure pumper, which has grown organically from one active hydraulic hp (hhp) fracturing fleet with 40,000 hhp in December 2011, now has 13 active fleets and 520,000 hhp.

Based on discussions with customers, Liberty expects to deploy six more fracturing fleets with a total of 240,000 hhp by the end of 1Q2018, for a total of 19 active fleets and an aggregate 792,500 hhp. Additional fleets consist of six fleets recently acquired, which are being upgraded. Liberty primarily serves exploration customers in the Permian, Denver-Julesburg, Williston and Powder River basins, but it expects to deploy at least one fleet for Eagle Ford Shale customers in the second half of this year.

Not all of the IPO action is in North America, with none more significant than one planned in 2018 by Saudi Arabia. Early indications are the IPO for Saudi Aramco could be valued at up to $2 trillion, which would be the world's largest.

Saudi Energy Minister Khalid al-Falih, who also is Aramco's chairman, said last year the company was interested in pursuing international upstream ventures, particularly in natural gas. Aramco's gas reserves now are estimated at around 8 trillion cubic meters.

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