The market for initial public offerings (IPO) in the U.S. energy market is heating up again this week for the onshore, with Houston’s Memorial Resource Development Corp. set to launch on Friday, followed next week by Eclipse Resources Corp.

Memorial, backed by private equity Natural Gas Partners, could raise close to $700 million in its IPO, which is timed to begin trading on the Nasdaq on Friday under “MRD” (see Shale Daily, April 7). At the midpoint of its expected price range of $16.00-18.00, Memorial could clear close to $700 million on the sale of 36 million shares. At that price, Memorial would command a market value of $3.3 billion.

Memorial, which includes the umbrella master limited partnership Memorial Production Partners LP, was founded in 2011. Its biggest focus today is the reemerging East Texas area, where it has an estimated 613 Bcfe of proved reserves, 68% weighted to natural gas. Proved resources in other formations include the Eagle Ford in South Texas, with 207 Bcfe, 68% gas; the Rockies, 61 Bcfe and 83% gas; Permian Basin, 18.1 Bcfe and 92% liquids; and California, 14.3 Bcfe and 100% oil.

Between January and March, Memorial’s average output reached 166.1 MMcfe/d, up 29% year/year. Adjusted earnings in the latest quarter also rose 29% from a year ago to $55 million from $42.8 million. Crude oil, natural gas and liquids sales, excluding hedges, totaled $100.3 million in the quarter, versus $67.6 million. Most of the sales volumes were natural gas (65%), with crude oil representing 18% and liquids 17%. On a revenue basis, crude oil was 41%, natural gas 45% and and liquids 14%.

Appalachia pure-play Eclipse Resources (ECR) also has an IPO set to launch next Monday (June 16) (see Shale Daily, May 9). The State College, PA-based producer has hopes to raise $864 million on the New York Stock Exchange with an offering of 30.3 million shares priced at $27.00-30.00. At the midpoint, it would command a market value of around $4.6 billion. At the end of March ECR was operating three horizontals; it has plans to use up to six across the Utica/Marcellus acreage this year.

“While a new public company may take away from other Utica/Marcellus players, we believe investors have an appetite for additional exposure to high quality Utica shale players…and this company will bring additional data points to the market, given its activity in the play,” said Topeka Capital Markets (TCM) analysts. “However, some investors have expressed concerns” about the company’s estimated ultimate recoveries (EUR) in the Utica, which have been 1.4 Bcfe/1,000 foot of lateral. That’s below the average for competitors Antero Resources Corp. and Gulfport Energy Inc. at about 2.6 Bcfe/1,000 foot of lateral.

“In our view, considering management’s history of running a public company, we believe they are coming out conservative given the lack of production history from their wells,” said the TCM team. “We expect EURs to improve as more wells are completed and as the company obtains greater production history.”

Producers have scored well in recent public offerings, with Encana Corp. last month achieving Canada’s largest in 14 years with PrairieSky Royalty Ltd. (see Shale Daily, May 29). In its debut, PrairieSky sold more than 26 million shares and earned close to $2 billion. West Texas-focused Parsley Energy Inc. last month sold about 50 million shares in its debut to raise close to $925 million (see Shale Daily, May 23).