Artificial lift firm Flowco Holdings’ stock surged in its first day trading on the New York Stock Exchange.
Houston-based Flowco is the latest player from the traditional oil and gas space to test the public markets with an IPO.
“FLOC” shares closed at $29.53 per share on Jan. 16, up 23% after opening at a public purchase price of $24 per share.
Flowco had originally set its IPO terms at between $21 and $23 per share. But the company was “blessed” to receive outsized demand among investors for its shares, driving the company’s ability to price the offering above the original guidance range, President and CEO Joe Bob Edwards told Hart Energy.
“Hats off to our advisers and bankers who helped us get in front of the right investors and get to a successful outcome,” Edwards said.
Investors are interested in Flowco’s story because artificial lift and production optimization services sit at the center of the “most interesting and exciting—and certainly the most durable—sector of oilfield services,” he said.
Flowco generates revenues through the long producing lives of oil and gas wells, many of which generate volumes for decades after being drilled and completed.
It’s not as exposed to the ups-and-downs of the drilling and completions side of oilfield services. As such, Flowco believes demand for its products and services is more stable than demand for D&C services.
“The ability to optimize production through the deployment of techniques and technologies, in many times we’ve developed ourselves in-house, is really quite unique in the space,” Edwards said. “I think that’s what led to a lot of investor interest.”
Flowco’s outlook for growth and future expectations hinges on production volumes, and the U.S. is producing more oil and gas today than any country in human history.
The U.S. Energy Information Administration (EIA) forecasts U.S. crude production to grow around 300,000 bbl/d to 13.5 MMbbl/d this year.
Most U.S. producers aren’t rushing to increase drilling and production. Many of the largest public operators are keeping 2025 output relatively flat compared to last year.
In the meantime, they’re lowering their costs by using fewer rigs to drill longer laterals underground.
“We have a very strong outlook, in our view, even in this relatively flat environment,” Edwards said.
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Permian power
The mighty Permian Basin is expected to make up roughly half of all U.S. crude oil production by next year, according to EIA forecasts.
Perhaps unsurprisingly, the Permian Basin accounts for about half of Flowco’s business today, Edwards said.
“The Permian, in many ways, is the most important oil and gas basin on the planet,” Edwards said.
But Flowco has also seen increasing revenues from other U.S. basins, including the Denver-Julesburg (D-J), Uinta, Piceance, Williston, Powder River and Appalachian basins.
As of Sept. 30, 2024, Flowco operated a fleet of over 4,300 active systems in U.S. basins.
Several factors drove Flowco to pursue an IPO, Edwards said. Flowco was created by merging two independent businesses last summer: White Deer Energy and Global Energy Capital.
The additional scale gained through the merger made pursuing an IPO more realistic and attractive for Flowco, he said.
A public listing also provides Flowco’s legacy owners paths to liquidity as the stock and the business matures over the next several years.
Before leading Flowco, Edwards was previously managing partner at private equity firm White Deer Energy. Before White Deer, he led $4 billion in equity investments at private equity firm First Reserve Corp.
Flowco is the latest of several energy-focused companies testing the IPO market. LNG developer Venture Global is aiming for a valuation of around $110 billion through an upcoming IPO.
Ohio Utica producer Infinity Natural Resources and Powder River E&P Peak Resources LP have also filed preliminary IPO paperwork in recent months.
Barnett Shale gas producer BKV Corp. successfully IPO’d in September 2024.
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