The IPO Buzz: Oil & Gas Producer Peak Resources (PRB) On Tap After Veterans Day

Peak Resources L.P. (PRB Proposed), an oil and gas limited partnership viewed as “a retail dividend play,” is set to price its unit IPO tonight – Tuesday, Nov. 12, 2024 – on the day after Veterans Day, the federal holiday honoring the men and women who serve or who have served in the U.S. military. This is the first IPO scheduled for pricing since Donald Trump was elected a week ago today (Tuesday, Nov. 5, 2024) to a second term as president of the United States. The U.S. stock market’s rally over the past week – aka “the Trump trade” – reflects Wall Street’s mood.  Janney Montgomery Scott is the lead book-running manager of the Peak Resources IPO. Roth Capital Partners and Texas Capital Securities are the joint book-running managers. Seaport Global is the co-manager. Peak Resources (PRB Proposed) intends to pay a quarterly dividend of 30 cents per Class A common unit – resulting in an annual payout of $1.20 or 8.6 percent annually per Class A common unit – according to the prospectus. That projected payout is based on the $14.00 mid-point of the $13.00-to-$15.00 price range for Peak Resources’ unit IPO. Peak Resources will issue an annual Form 1099 to unit holders to report the dividend earnings – simplifying the record-keeping process for potential IPO investors. The prospectus for Peak Resources’ unit IPO shows that the limited partnership aims to raise $65.8 million by offering 4.7 million Class A common units at a price range of $13.00 to $15.00 per unit. This is an NYSE – American Exchange listing. Peak Resources plans to use about $40.9 million – or about 71.5 percent of the IPO’s net proceeds – to repay part of the amount outstanding under its existing credit facility, the prospectus said. The limited partnership said it also intends to use about $15.0 million from a new credit facility (in negotiations now) to repay the existing credit facility in full. The proposed symbol – PRB – stands for Powder River  Basin, the Wyoming area where Peak Resources is actively engaged in exploring and developing its oil and natural gas assets. The company’s principal executive offices are based in Durango, Colorado. Peak Resources L.P. is not profitable. The oil and gas limited partnership reported a net loss of $0.13 million (a net loss of $130,000) on revenue of $48.7 million for the 12 months that ended June 30, 2024, according to financial statements in the prospectus. The rest of this week’s IPO Calendar shows light traffic after U.S. Election Day: A micro-sized IPO – zSpace (ZSPC Proposed) – is also set to price tonight – Tuesday, Nov. 12, 2024; a SPAC IPO – Horizon Acquisition II – is on the IPO front burner for pricing sometime this week, and a couple of tiny IPOs are in the hopper for possible pricing this week, if they receive final sign-off from the SEC and NASDAQ. Stay tuned.