The oil patch has become fertile ground again for initial public offerings.
This time around, a few notable trends have emerged, including companies building larger production bases before going public.
Such is the case with the next Calgary-based producer set for an IPO, Northern Blizzard Resource Inc., which gained a large operating base in 2010 when it paid $975-million for heavy oil assets from Nexen Energy Inc.
The five-year-old company and its two U.S.-based private equity investors, Riverstone Holdings LLC and NGP Energy Capital Management LLC, are looking to raise a total of $500-million in a public offering, according to a source close to the deal. The shares have yet to be priced.
The offering will follow other recent ones including Journey Energy Inc., Cardinal Energy Ltd. and PrairieSky Royalty Ltd. -- the largest IPO in Canada in the last 14 years which raised $1.67-billion.
The brisk activity is part and parcel of an overall revival in oil-patch financing as capital has returned to the sector in a big way following a weak 2013.
Others said to be readying initial offerings for the coming months include Seven Generations Energy Ltd., which concentrates on developing the Montney shale play in Alberta; Teine Energy Ltd., which is developing oil prospects in the Viking formation of Saskatchewan; and Petrus Resources Ltd.; which has operations in the Montney and Alberta foothills.
"There aren't any 500-barrel-a-day or 1,000-barrel-a-day startups. These guys are quite a bit bigger than that across the board...these companies are well established," said Alan Tambosso, president of Sayer Energy Advisors.
"The other thing is that when you've been private for a long time, the cost of capital begins to catch up with you. If you've had the private equity guys in for a while, you maybe have to tap other sources and public markets can do that."
In grey market, over-the-counter trading, Seven Generations currently has a bid-ask range of $40-$42.50, and Petrus sells for $3.25, according to Liquidity Source.
Petrus, which also counts NGP Energy Capital among its investors, may also take an alternative route to public markets, such as a reverse takeover or merger, though nothing has been decided, an industry source said.