After registering record activity last year, there has been a sharp decline in public listings in 2022, which is probably the worst year ever for the IPO market in terms of the number of companies going public. Among the most recent IPO filings, the upcoming listing of Bounty Minerals, Inc. is a closely followed event.
Headquartered in Fort Worth, Bounty Minerals is an acquisition partnership that buys oil and gas minerals exclusively in the Appalachia region. So far, the company has acquired around 61,000 net mineral acres in West Virginia, Pennsylvania, and Ohio.
As per documents submitted with the Securities and Exchange Commission last week, the company is preparing to raise around $100 million from the primary market. Details of the offering, such as its size and the offer price, will be revealed later. Raymond James, Stephens Inc., and Stifel are the book-runners in the offering.
Pursuant to the offering, shares of Bounty will trade on the New York Stock Exchange under the ticker symbol BNTY. The management plans to use the proceeds from the offering mainly to purchase the units of Bounty LLC, for which Bounty Mineral is a holding company, and to fund future acquisitions of mineral interests.
In the six months that ended June 30, Bounty Minerals generated total revenues of $63.6 million, which is more than double the prior-year number. Net income rose sharply to $50.02 million from $12.1 million reported in the six months that ended June 2021. Total production increased by 5% year-over-year to 42,568 Mcfe/d during that period.
Bounty is engaged in the purchase and management of mineral interests in the Appalachian Basin, with a focus on non-producing minerals in developing shale plays. Currently, the company does not own properties outside of Appalachia — after divesting its assets in Oklahoma in August. There is a significant potential to continue development activities in the basin, since only around a sixth of the existing portfolio has been developed as of June 2022.
Founded by Jon Brumley, who is serving as the executive chairman, Bounty Minerals was incorporated in June 2022. As of December 2021, it had 13 full-time employees and 16 persons engaged as consultants. The primary risk facing the business is the highly competitive nature of the oil and natural gas industry. The growing popularity of renewable energy sources adds to the competition.
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