Texan LNG Import Terminal Builder Excelerate Energy Launches IPO as Natural Gas Prices Soar

Natural gas prices are soaring with LNG demand seeing the US overtake Australia and QATAR as the largest exporter of natural gas. In this backdrop Woodlands Texas based Excelerate Energy Inc who build liquified natural gas import terminals went public and raised $384 million at a $2.5 billion market cap million with its initial public offering under the symbol EE. The stock closed up 17%. The SEC certified the LNG company’s registration on April 8 and shares began trading on the New York Stock Exchange on April 13

Excelerate sold 16 million shares priced at $24 each on the New York Stock Exchange, and underwriters have the option to purchase an additional 2.4 million shares. The company’s lead book-running managers for the IPO are Barclays Capital Inc., J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC, with Wells Fargo Securities also acting as a book-running manager. Houston-based firm Tudor, Pickering, Holt & Co. is among Excelerate’s several IPO co-managers.

The Import terminals can re-gasify the LNG for use in power generation or heating.

Excelerate is on the opposite side of the U.S. Gulf Coast’s booming LNG export industry, in which large export terminals turn the region’s abundant natural gas into liquid, then load the high-pressure substance onto specialized tankers for overseas markets. When you buy the LNG needs an import terminal that can re-gasify the LNG for use in power generation or heating.

“Due to recent geopolitical events, including the invasion of Ukraine by Russia, we are seeing an increase in inquiries for our (floating storage and regasification units) and integrated terminal services,” Excelerate wrote in its filings with the SEC. “This interest is mainly coming from countries that have historically been dependent on imports of Russian natural gas.”

Excelerate built the world’s first offshore regasification vessel and as well as the first deepwater terminal by 2005. Today, the company is helmed by President and CEO Steven Kobos, and it owns and operates 10 floating storage and regasification units, or FSRUs. Kobos started that role in 2018 after serving as an Excelerate board member for 11 years, according to the company’s website.

Billionaire founder George Kaiser who is also chairman of Tulsa, Oklahoma-based BOK Financial Corp. (Nasdaq: BOKF), started Excelerate in 2003. He will retain control of at least 75% of Excelerate, the company said, down from his 100% control of the company today after the IPO. One of his co-founders was Kathleen Eisbrenner, who went on to become the founder and chairperson of NextDecade Corp. (Nasdaq: NEXT) before her death in 2019.

Excelerate boosted its revenue and income in 2021 by expanding beyond its typical business of operating floating LNG import terminals that it leases out via time-charter contracts, the company said. Excelerate generated $888.6 million in revenue in 2021 with $41.2 million in net income, according to the SEC filings.

That was double the company’s 2020 revenue of $430.8 million and about 25% higher income than 2020, when Excelerate netted a profit of $32.9 million. The time-charter agreements accounted for all of its revenue in 2020, after which Excelerate took advantage of high natural gas and LNG prices to make additional sales, which accounted for a whopping 47% of its revenue in 2021.

Looking forward, the company said it plans to spend about $1 billion in the future on its projects in the advanced development stages, including power-generation units that use LNG directly as feedstock and small-scale natural gas distribution.

The company has major presences in Argentina, Bangladesh, Brazil and Pakistan, claiming to be one of the top providers of natural gas in each of those countries. Three-fourths of Excelerate’s 900 employees work offshore on its vessels.

Source: Excelerate

From The Traders Community Research Desk