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Solaris Midstream Holdings is ready to challenge the market with an IPO driven by environmentally friendly values at its core.

Solaris Midstream Holdings is ready to challenge the market with an IPO driven by environmentally-friendly values at its core.

An initial public offering (IPO) is in the works for ConocoPhillips affiliated with Solaris Water Midstream, a company whose water pipelines serve the oil and gas fracking industry in the U.S. The Texas-based company seeks to attract the attention of sensible investors with its sustainability pitch in the aim to expand its scale of operation and recycling capacity.

Extensive environmental degradation caused by fracking has gradually become a boiling point in the energy-linked industries. Fracking relies on water-bound chemicals and sand in order to release oil and gas, which caused it to be accused of destroying and polluting freshwater resources.

In the arid areas of the Permian Basin where Solaris operates, the consequences of such pollution are a life-threatening risk. In New Mexico and Texas in particular water shortages worsen as energy companies use huge amounts of groundwater while consumers struggle with droughts.

In the meantime Solaris has pledged to recycle up to 60% of the water it provides for fracking by 2022, an increase from 42.1% in 2020, and will continue to improve further. The company is confident that with its proposed water recycling system damages caused by fracking can be negated, with the hopes of making the process essentially environmentally friendly by 2030.

Solaris outlined these goals as part of a $400 million sustainability-backed bond that is issued in March. This makes Solaris the only company among its peers with concrete targets to increase recycled produced water.

Solaris is set to go public in New York in a confidential initial public offering (IPO). The listing may come as early as this year-end with a speculated value of more than 1 billion dollars. The company intends to attract investors who adhere to environmental, social, and corporate governance (ESG) initiatives. Not just in fracking, but in the energy sector as a whole, water is becoming an increasingly important issue.

Should they succeed, this would be the first public U.S. pipeline company to be listed in three years. The last one was Rattler Midstream in 2019 since the sector has been shunned by many investors because of its poor returns over the years, particularly among other industries such as technology.

While the water recuperation rates between U.S. companies and shale plays may shift significantly, the whole US industry nevertheless is expected to create a lot of challenges for the environment. According to a number of industry professionals, a large portion of the wastewater leaving the oil field in 2022 still won't be reused, instead being infused into disposal wells, and Solaris stands to revolutionize this practice.

For its part in this change, the Rextag platform also strives to include water produced from oil and gas wells. Water conservation is a key concern for oil & gas companies and their service providers. Connect with us to learn more about how Rextag's asset intelligence can contribute to your ESG performance.

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It’s all about the ESG (and RSG): Southwestern Energy and Kinder Morgan stroke a deal for gas transportation

Southwestern Energy Co. signed an agreement with Kinder Morgan Inc. for the transportation of responsibly sourced natural #gas (RSG) to the Northeast markets. Tennessee Gas Pipeline, a subsidiary of Kinder Morgan, will be carrying out this notion come November. This move proves yet again, that the energy market is tilting towards sustainability and renewability.

The two Bakken shale producers announced in a joint statement on March 7 that they had reached an agreement to unite in a $6 billion "merger of equals." Combining these two companies will create a leading Williston Basin position with assets covering approximately 972,000 net acres, production of 167,800 boe/d, and an enhanced free cash flow generation that will generate capital returns to shareholders. A historic collapse in oil prices prompted both Whiting and Oasis oil companies to file for Chapter 11 bankruptcy protection in 2020. Thus, the merger can be viewed as a preventive measure to avoid going out of business.

Shareholder’s payout target was increased by 50% after the largest U.S. independent oil producer surpassed Wall Street’s earnings estimates on growing energy prices, said Houston-based Conoco Phillips Co. on Aug. 4. Due to Western sanctions on major producer Russia throttling energy supply amid a rebound in demand from pandemic lows, oil and gas #prices have soared. Crude has been trading more than 25% higher since the start of the year and results also benefited from high natural gas prices. Meanwhile, shares were down a fraction, to $91.03, in early trading but are up about 26% year to date. Conoco Phillips stated, that the average price obtained for a barrel of oil and gas accelerated 77% from a year earlier to $88.57. The company acknowledges that it has not hedged any of its oil and gas sales to make the most of higher market prices. The capacity of 1.69 million boe/d was in line with Wall Street estimates, however, the company expected the current quarter’s output would be between 1.71 million and 1.76 million boe/d.

California oil joint venture, Aera Energy, of Exxon Mobil Corp. and ShellPlc is being sold to German asset manager IKAV, according to the agreement of Sept. 1. Shell noted that the sale of its 51.8% membership interest in Aera Energy is for a total consideration of about $2 billion in cash with additional contingent payments based on future oil prices, subject to regulatory approval. However, the total transaction value was not disclosed. Being one of California’s largest oil and gas producers, Aera Energy accounts for nearly 25% of the state’s production. The sale by Exxon Mobil and Shell ends a 25-year-long partnership in California, meanwhile, it persists a streak of divestments of mature oil and gas properties by the two supermajors. Aera Energy LLC operates about 13,000 wells in the San Joaquin Valley in California, producing oil and associated gas. In 2021, Aera took out about 95,000 boe/d. Exxon Mobil’s interests in the Aera oil-production operation in California contained a 48.2% share of Aera Energy LLC and a 50% share of Aera Energy Services Co. held by Mobil California Exploration & Producing Co. Moreover, Exxon Mobil affiliates have signed a separate agreement for the sale of an associated loading facility and pipeline system. The sale effectively ends Shell’s upstream position in California. The company reported that the divestiture is valued to result in a post-tax impairment of $300 million to $400 million, subject to adjustments.

The completion of the merger between Centennial Resource Development Inc. and Colgate Energy Partners II LLC happened on Sept. 1, sealing the debut of Permian Resources Corp., which is considered the largest pure-play E&P company in the Delaware Basin. Permian Resources’ idea was to combine two successful E&P companies, creating a better, stronger, and more strategically compelling company. Centennial and Colgate announced an agreement to merge in May, denying rumors that Colgate, a privately held independent Midland-based company, had been seeking an IPO. The merger estimated Colgate at about $3.9 billion and consists of 269.3 million shares of Centennial stock, $525 million of cash, and the assumption of approximately $1.4 billion of Colgate’s outstanding net debt. Permian Resources, being the combined company, has a deep inventory of “high-quality” drilling locations on around 180,000 net acres the companies anticipate will provide more than $1 billion of free cash flow in 2023 at current strip prices, in accordance with the company release on Sept. 1.

2022 blog posts