Bounty Minerals (BNTY) Stock Begins U.S. IPO Rollout

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A Quick Take On Bounty Minerals

Bounty Minerals (BNTY) has filed to lift $119 million in an IPO of its Class A typical stock, based on an S-1 registration assertion.

The agency has acquired pure fuel royalty pursuits in the United States.

BNTY is well-positioned to profit from rising vitality demand worldwide.

I’ll present a remaining opinion once we be taught extra concerning the IPO from administration.

Bounty Overview

Fort Worth, Texas-based Bounty Minerals was based in 2012 to amass non-producing mineral pursuits, primarily pure fuel deposits positioned within the Appalachian Basin.

Management is headed by President and CEO, Ms. Tracie Palmer, who has been with the agency since 2013 and was beforehand at Encore Operating Company and Vanguard Natural Resources.

The chart beneath reveals the corporate’s curiosity acquisition and manufacturing historical past:

Company Interest And Production History

Company Interest And Production History (SEC)

As of June 30, 2022, Bounty has booked a good market worth funding of $468.2 million from traders.

Bounty’s Market & Competition

According to a 2021 market research report by U.S. Energy Information Administration, the U.S. dry pure fuel manufacturing from shale formations within the Appalachian Basin has grown dramatically lately, because the chart reveals beneath:

U.S. Dry Shale Natural Gas Production

U.S. Dry Shale Natural Gas Production (U.S. EIA)

Takeaway capability from the area has additionally grown markedly, as proven right here:

U.S. Northeast Takeaway Capacity

U.S. Northeast Takeaway Capacity (U.S. EIA)

Major aggressive or different business members embody:

  • Antero Resources

  • Ascent Resources Utica

  • Chesapeake Energy

  • Chevron

  • CNX Gas Company

  • EQT Production

  • Gulfport Energy

  • PA Gen Energy

  • Range Resources

  • SWN Production Co.

  • Rice Drilling

  • XTO Energy

  • Others

Bounty Minerals’ Financial Performance

The firm’s current monetary outcomes might be summarized as follows:

  • Growing topline income

  • Increasing working revenue and margin

  • Higher money circulate from operations

Below are related monetary outcomes derived from the agency’s registration assertion:

Total Revenue

Period

Total Revenue

% Variance vs. Prior

Six Mos. Ended June 30, 2022

$63,607,481

135.4%

2021

$74,432,801

151.2%

2020

$29,629,762

Operating Profit (Loss)

Period

Operating Profit (Loss)

Operating Margin

Six Mos. Ended June 30, 2022

$48,994,779

77.0%

2021

$44,996,316

60.5%

2020

$5,818,764

19.6%

Net Income (Loss)

Period

Net Income (Loss)

Net Margin

Six Mos. Ended June 30, 2022

$50,020,401

78.6%

2021

$44,997,871

70.7%

2020

$5,935,929

9.3%

Cash Flow From Operations

Period

Cash Flow From Operations

Six Mos. Ended June 30, 2022

$55,540,293

2021

$46,136,457

2020

$18,297,493

(Glossary Of Terms)

(Source – SEC)

As of June 30, 2022, Bounty had $27.6 million in money and $5.7 million in complete liabilities.

Free money circulate throughout the twelve months ended June 30, 2022 was $84.9 million.

Bounty Minerals’ IPO Details

Bounty intends to lift $119 million in gross proceeds from an IPO of its Class A typical stock, though the ultimate determine might differ.

Class A and Class B widespread stockholders will every be entitled to 1 vote per share.

The S&P 500 Index not admits companies with a number of courses of stock into its index.

No present shareholders have indicated an curiosity to buy shares on the IPO value.

Management says it’ll use the online proceeds from the IPO as follows:

We intend to contribute the entire internet proceeds from this providing to Bounty LLC in alternate for Bounty LLC Units. Bounty LLC intends to make use of (an as-yet undisclosed quantity) of the online proceeds from our sale of shares to buy Bounty LLC Units, along with an equal variety of shares of Class B widespread stock, from the Exchanging Members (at a purchase order value per unit and share of Class B widespread stock, primarily based on the midpoint of the estimated value vary set forth on the duvet web page of this prospectus, internet of underwriting reductions and commissions) and (an as-yet undisclosed quantity) of the online proceeds to fund future acquisitions of mineral pursuits; nevertheless, it at the moment doesn’t have any particular acquisitions deliberate.

(Source – SEC)

Management’s presentation of the corporate roadshow will not be accessible.

Regarding excellent authorized proceedings, administration says that it’s ‘distant that pending or threatened authorized issues could have a cloth antagonistic influence on our monetary situation.’

The listed bookrunners of the IPO are Raymond James, Stifel, and Stephens.

Commentary About Bounty’s IPO

BNTY is searching for public capital market funding to amass further mineral pursuits per its marketing strategy.

The agency’s financials have proven increased topline income, rising working revenue and margin, and rising money circulate from operations.

Free money circulate for the twelve months ended June 30, 2022 was $84.9 million.

The agency at the moment plans to pay dividends based on the next coverage:

We count on Bounty LLC to initially pay quarterly distributions to us and the Existing Owners equal to 100% of [i] money accessible for distribution and [ii] money from lease bonus earnings, and that we, in flip, pays quarterly dividends equal to the quantity obtained from Bounty LLC internet of money taxes. From time to time, we might goal to stability the return of capital to traders with the selective allocation of capital towards acquisitions that we consider shall be accretive to stockholder worth whereas preserving a robust stability sheet by way of various commodity value environments.

The market alternative for pure fuel derived from the Appalachian Basin is giant, and the pricing surroundings is favorable on account of current pure fuel market developments on account of Russia’s warfare on Ukraine.

Raymond James is the lead underwriter, and there’s no knowledge on the agency’s IPO efficiency return over the past 12-month interval.

The main threat to the corporate’s outlook as a public firm is the risky nature of vitality costs lately.

However, with the gradual reopening of the Chinese economic system on account of relaxed COVID-19 insurance policies, demand for vitality will possible enhance within the interval forward, favoring pure fuel producers and royalty corporations corresponding to Bounty.

I’ll present a remaining opinion once we be taught extra IPO particulars from administration.

Expected IPO Pricing Date: To be introduced.



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