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Solaris Midstream Holdings is ready to challenge the market with an IPO driven by environmentally friendly values at its core.
08/26/2021
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.
If you are looking for more information about energy companies, their assets, and energy deals, please, contact our sales office mapping@hartenergy.com, Tel. 619-349-4970 or SCHEDULE A DEMO to learn how Rextag can help you leverage energy data for your business.
Merger of Equals: Whiting and Oasis $6B Deal
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.
Colgate Energy's owners are planning to go public
Colgate Energy is planning to float its shale oil producer in the Permian's Delaware Basin on the stock market. If successful, this IPO would be the first major U.S. oil producer offering since Jagged Peak Energy's IPO in January 2017. Looks like investors’ confidence in the sector is returning as U.S. crude prices hit their highest in seven years late last year S&P energy index delivered roughly twice the return of the S&P 500 in 2021.
In Wyoming during 2023, the oil and gas industry experienced various trends and developments. Wyoming ranked 8th nationally in both crude oil and natural gas production, significantly contributing to the economy through property and severance taxes. The state had a peak of 27,951 producing wells in 2022, including oil and gas wells, with 33 operating gas plants processing nearly 97% of the state's gas production. Notably, 21 of Wyoming's 23 counties produce oil and/or natural gas, with Converse County leading in crude oil production and Sublette County in natural gas production. U.S. Energy Information Administration (EIA) predicted that crude oil production across the United States would increase to 12.8 million b/d in 2024. Throughout 2023, oil production in Wyoming showed an upward trend, with more than 95 million barrels expected to be produced, an increase of about 3 million barrels from 2022. This rise in oil production was partly attributed to the completion of 110 newly drilled oil wells in the first half of the year, mainly in the Powder River Basin. However, natural gas production faced a decline due to the aging of wells and a low number of new gas wells being completed. Only 18 new gas wells were finished in the first half of 2023, with a noted interest in drilling applications, suggesting potential future developments.
XCL Resources is seeking approval from the Federal Trade Commission (FTC) for its proposed acquisition of Altamont Energy LLC, another Utah-based oil producer. This initiative is backed by XCL's parent entity, EnCap Investments LP, a notable private equity firm. Discussions about purchasing Colorado-based Altamont Energy began in the previous summer, as highlighted in FTC documentation.
Tallgrass Energy has started a new open season for the Pony Express Pipeline, and this is the second time they're doing it in 2024. They're looking for companies that want to move their crude oil from the Williston Basin and are offering special rates as an incentive. This 30-day event kicked off on March 11. To get the full details, companies need to sign a confidentiality agreement with Tallgrass.