Private equity-backed LandBridge (LB) priced its IPO at $17.00 – $2.00 below the bottom of its $19.00-to-$22.00 range – on Thursday night, June 27, 2024. LandBridge priced 14.5 million shares – the number of shares in the prospectus – at $17.00 each to raise $246.5 million. The stock is expected to start trading today – Friday, June 28, 2024 – on the New York Stock Exchange.
Goldman Sachs, Barclays and Wells Fargo Securities led the joint book-runners’ team, which included Citigroup, Piper Sandler and Raymond James.
A cornerstone investor, Horizon Kinetics Asset Management LLC, had indicated an interest in buying up to $80 million of stock in the IPO – with no lock-up agreement, the prospectus says.
LandBridge owns about 220,000 surface acres in and around the Delaware sub-basin in the prolific Permian Basin, which is the most active region for oil and natural gas exploration and development in the United States, the prospectus says.
Houston-based LandBridge shares a financial sponsor – Five Point Energy, a Houston private equity firm – and its management team with WaterBridge, one of the largest midstream water companies in the United States, according to the prospectus. WaterBridge runs a large-scale network of pipelines and other infrastructure in the Delaware Basin. As of June 15, 2024, the WaterBridge pipeline network and other infrastructure handled about 2.0 million barrels per day (bpd) of water associated with oil and natural gas production, the prospectus says.
““We receive royalties for each barrel of produced water that WaterBridge handles on our land as well as surface use payments for infrastructure constructed on our land. For every 100,000 bpd of incremental produced water that WaterBridge brings onto our surface, we expect to generate royalty fees of $4.0 million to $6.0 million per year, including skim oil revenues.”
LandBridge says its revenues come from multiple sources, including oil, gas and mineral royalties; the use of its surface acreage and the sale of resources from its land.
The company also plans to pay a dividend, but the amount of the dividend has not been determined yet, the prospectus says.
LandBridge is profitable, according to financial statements in the prospectus.
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