Noble hopes to raise around $270 million with midstream MLP IPO
Ten months after postponing the IPO of its wholly owned subsidiary Noble Midstream Partners, Noble Energy (ticker: NBL) announced that plans for a public offering are back on the front burner.
The Houston-based company said that it plans to offer 12.5 million common units with the option for an additional 1.9 million units, representing a 39.3% and 45.2% limited partnership, respectively. Noble anticipates an offer price of $19.00 to $21.00 per unit in the MLP, which will trade under the ticker NBLX.
The IPO includes the company’s DJ Basin crude oil, natural gas and water-related midstream assets. Noble holds more than 500,000 net acres in northern Colorado’s DJ Basin, with the company’s largest onshore field located in the Wattenberg. NBL has invested approximately $600 million in DJ midstream infrastructure in order to meet the demand coming from the region according to a company investor presentation.
Source: Noble Energy
The company postponed an earlier IPO of its midstream assets in November, 2015, due to “unfavorable equity market conditions.” The original IPO had an estimated value of approximately $300 million, according to and SEC filing. Assuming that the company does the follow-on offer, net proceeds will be approximately $270 million, a research note from Stifel said today.
“Based on the mid-range price of $20/share and exercise of the underwriter option, our NBL YE16 net debt/TTM EBITDA estimate declines to 2.5x from 2.6x and our 2016 interest coverage (including cash) increases to 8.8x from 8.7x,” Stifel said in its note.
