LandBridge Aiming to Raise Up to $319 Million in U.S. IPO
LandBridge, a significant landowner in the oil-rich Permian Basin, announced on Monday their plan to raise up to $319 million through their initial public offering (IPO) in the United States.
The company, which is backed by private equity firm Five Point Energy, controls about 220,000 surface acres in the Permian Basin. This land can be leased to oil producers, and the company also sells resources extracted from its land. This business model is largely based on fee-based contracts. This setup minimizes LandBridge's exposure to fluctuations in commodity prices. Such a strategy is critical, especially in times when geopolitical and other risks contribute to uncertainties in oil demand.
Current Market Context
Just last week, the U.S. Energy Information Administration slightly increased its forecast for oil demand growth in 2024. However, new and concerning economic data from China has tempered enthusiasm, keeping optimism in check this Monday.
IPO Details
LandBridge plans to offer 14.5 million shares, priced between $19 and $22 each. The shares will be listed on the New York Stock Exchange under the symbol "LB".
Public markets in the United States have experienced a surge in IPOs in recent months, following an almost two-year hiatus. The encouraging outlook for a soft landing for the economy is providing companies with the confidence to list their shares.
Goldman Sachs and Barclays are named as the lead underwriters for this IPO.
