(Bloomberg) — The energy industry is set to stage a comeback in the US initial public offerings market, with sizable deals springing up after the worst year since 2003.
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Just six energy IPOs priced on US exchanges in 2024, raising $667 million to mark the lowest volume for the sector in 21 years, data compiled by Bloomberg show. That figure could be surpassed in January alone.
Natural-gas exporter Venture Global Inc. is seeking to raise $2.3 billion in a listing and oil-field services firm Flowco Holdings Inc. is expected to price an IPO of as much as $409 million this week.
The rebound comes amid a combination of rising commodity prices, outperformance from recent energy IPOs and pro-oil policies from President-elect Donald Trump.
All of these factors mean “the stars are lining up” for more energy deals, said Josef Schuster, founder and chief executive officer of Ipox Schuster LLC, an index provider focused on new listings. Expectations that Trump will champion US liquified natural gas exports and the energy sector will help provide a boost to the sector and sentiment for those looking to go public, Schuster said.
“I think the market is really ready for a slew of good energy IPOs,” Schuster said, adding that energy deals were well-received last year even in a time with lower oil and natural-gas prices.
Landbridge Co.’s $283 million listing was the largest oil and gas IPO on a US exchange in 2024, according to data compiled by Bloomberg, and its shares have climbed over 313% since the Houston-based firm started trading in late June. BKV Corp.’s offering was the second-largest, raising $270 million. Its stock is also up, rising 33% since its debut in September.
Indeed, some of the comparable stocks for Venture Global and Flowco have also enjoyed strong runs. Shares of Cheniere Energy Inc., a large LNG exporter competing with Venture Global, have climbed for four straight years and rose 26% in 2024. Flotek Industries Inc., a peer for Flowco, saw its stock climb 143% last year.
The outlook for the broader US IPO market in 2025 is generally optimistic, after deals raised $43 billion in 2024 — a jump of more than 60% versus 2023, data compiled by Bloomberg show. That figure remains below the pre-pandemic average, however, and the recent run-up in Treasury yields is fueling a degree of concern.
Venture Global and Flowco are coming to market at a time when inflation expectations and commodity prices have helped make the oil and gas sector the top-performer on the S&P 500 index to start the year — which also helps sentiment for more deals in the space.
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“There’s a lot of opportunities and interest for these kind of sexy, old-economy assets,” Schuster said.
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