Shares of Flowco Holdings (FLOC.N) opened nearly 21% above the initial public offering price in their market debut on Thursday, giving the oilfield services provider a market value of about $2.55 billion.
The company's shares opened at $29 apiece, compared with the IPO price of $24.
Houston, Texas-based Flowco sold 17.8 million shares above the marketed range of $21 to $23 apiece to raise $427.2 million.
REGULATION RAMIFICATION
Hopes of a friendlier regulatory environment for deals and offerings under the incoming Donald Trump administration have bolstered investor appetite in fresh stock flotations.
"Flowco has timed its stock market flotation perfectly, offering its shares to the public just as Donald Trump returns to the White House with policies that should provide a tailwind for companies involved in the US oil and gas industry," said Daniel Coatsworth, an investment analyst at AJ Bell.
Donald Trump, who takes office as president on Monday, has also promised to maximize U.S. oil and natural gas production, which is already at record highs, partially by eliminating what he considers redundant regulations and bureaucracy.
"Investors taking part in the IPO clearly believe Flowco's work pipeline is going to improve as a result of the new administration," Coatsworth added.
Strong equity markets and falling interest rates have also boosted companies' confidence to proceed with listings.
FLOWCO RUNWAY
In June 2024, Flowco Holdings was formed after Global Energy Capital and White Deer Energy struck a deal, to combine Flowco Production Solutions, Estis Compression and Flogistix.
The company specializes in services that help improve the oil and gas extraction rate from wells. Its business is divided into two segments – production solutions and natural gas technologies.
Unlike its rivals, Flowco is unaffected by fluctuations in commodity prices due to its business focus, Flowco CEO Joe Bob Edwards said in an interview with Reuters.
"Our business is stable, much less cyclical and much more durable part of the energy lifecycle," Edwards added.
J.P. Morgan, Jefferies and Piper Sandler were the lead underwriters for the offering.
