Infill Thinking Lifting the O&G knowledge curve
Frac IPOs are back. We mean that literally because the company about to make its public debut will trade under the ticker FRAC.
This week, Keane Group Inc., owner of the 7th largest US frac fleet and employer of 1,251, filed an S-1 for a potential IPO. The company is the largest privately held hydraulic fracturing outfit in the US market today. Their coming to market closely follows the IPO of Smart Sand, a Wisconsin frac sand provider that priced its offering in November.
When you start adding up all the factors that underpin the frac investment thesis, it’s little wonder that Wall Street is receptive to underwriting equity in the completions space once again. Amid limited investment in horsepower since 2014, parked frac equipment has been cannibalized and retired. Meanwhile, longer laterals and higher stage counts have taxed working horsepower more than ever.
Now commodity prices have more than doubled and drilling budgets are poised to increase again in the US during 2017 for the first time in two years. Stage counts are ready for lift off, and underlying trends point to a strengthening hydraulic fracturing market next year. This IPO should perform nicely.
In this update, we introduce Keane and then run through some competitive market intelligence that we’ve extracted from the S1 filing – very interesting tidbits for the US frac market…
There’s a lot more to this story…
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