Fort Worth-based oil and gas company MorningStar Partners LP, the company Bob Simpson founded after selling XTO Energy, has presented detailed plans for a proposed $100 million IPO on Jan. 18.
MorningStar announced in a press release that it will rename the company TXO Energy Partners LP, will trade on the New York Stock Exchange under the symbol “TXO” and plans to issue five million common units at an estimated price range of $19 to $21 per share to offer. If the units sell at that price, TXO Energy will raise about $100 million. The Company announced in November that it will be focused on acquiring, developing and producing oil and gas reserves primarily in the Permian Basin of Texas and New Mexico and the San Juan Basin of New Mexico and Colorado.
TXO logo (courtesy of TXO)
The company’s shareholders include Global Endowment Management LP and Luther King Capital Management. Raymond James, Stifel, Janney Montgomery Scott and Capital One Securities are acting as underwriters for the offering, according to the Securities and Exchange Commission filing.
Simpson founded MorningStar after selling his previous company, XTO Energy, to ExxonMobil for $41 billion in 2009. The company has kept a low profile despite having a high-profile address: 400 W. Seventh St., formerly the Fort Worth Star-Telegram -Building next to the Fort Worth Club.
Simpson’s management team at MorningStar includes several former XTO Energy executives.
Few energy companies have gone public in recent years, although the energy sector has posted strong results, said Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University. Bullock said the political uncertainty has made it harder for traditional energy companies to raise funds.
But TXO’s reliable management team mitigates some of that uncertainty for investors, he said.
“That’s what investors would be looking for, a company with good leases, a solid management team, and rising commodity prices,” Bullock said. “Bob Simpson and his team tick all the right boxes.”
According to the November filing, the Company’s assets at the end of 2021 consisted of approximately 846,000 acres of leased and mineral land located primarily in the Permian and San Juan Basins. Total estimated proven reserves were approximately 130 million barrels of oil equivalent per day, of which approximately 37% was oil.
During the first nine months of 2022, MorningStar said it produced an average of about 23,265 barrels of oil equivalent per day, of which about 70% came from the company’s operated facilities.
Bullock said he hopes TXO’s IPO is the start of a trend.
“It would be good for the industry if that were the case,” he said.
Bob Francis is the business editor of the Fort Worth Report. Contact him at [email protected] At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our Editorial Independence Policy here.
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