Securing your future: Public offerings for O&G companies

As private mid-size oil and gas producers explore public offerings to navigate an evolving investment landscape, careful preparation is crucial. Private equity investments in U.S. oil and gas have decreased by 77 percent since their peak in 2015. Meanwhile, strategic buyers are favoring single acquisitions valued between $5 billion and $60 billion. As a result, mid-size producers, those with up to $1 billion in revenue, may need to explore public markets for funding and growth opportunities. Successfully transitioning to public markets requires strategic readiness to secure essential capital.

Public offerings can open valuable opportunities for producers, allowing access to a diverse pool of investors seeking disciplined cash-flow-positive operations. Given the average deal value of $340 million for recent initial public offerings (IPOs), companies must prepare to act swiftly when market windows appear. This preparation involves focusing on several key areas to ensure capital markets readiness and optimize valuation and fundraising opportunities:

• Meet initial filing requirements: Prepare Form S-1 with PCAOB-audited financial statements, detailed management discussion and analysis (MD&A), and SEC-compliant reserves reporting. Emphasize distributable cash flows in your equity story.
• Ensure ongoing financial reporting: Establish systems, processes, and personnel to meet quarterly and annual reporting deadlines, and communicate KPIs effectively.
• Determine optimal tax structure: Choose the tax structure that aligns with your investor base. Consider the implications of C-Corp versus Up-C structures, including tax receivable agreements (TRAs).
• Select the right transaction structure: Decide between an IPO, SPAC, or reverse merger, each with distinct processes and timelines.
• Ensure robust compliance capabilities: Implement systems for Sarbanes-Oxley compliance, SEC disclosure adherence, corporate governance, and transparent environmental, social, and governance (ESG) reporting to meet heightened regulatory demands

Download our report to learn more about navigating public offerings for mid-size oil and gas producers, including strategic preparation tips and insights into optimizing market opportunities.