initial public offerings (IPOs) trading on American exchanges

Thursday, December 15, 2011

Bonanza Creek Energy (BCEI) - profile

Bonanza Creek Energy searches for a treasure of black gold. The independent oil and natural gas company has exploration and production assets in Arkansas, Colorado, and California. Unlike many in the industry, it operates nearly all of its projects and has an 85% working interest in its holdings. Bonanza Creek produces about 3,700 barrels of oil equivalent (BOE) per day and has proved reserves of 32,860 million BOE, about two-thirds of which is oil and natural gas liquids. Most of the company's proved reserves are at their Mid-Continent holding in Arkansas' Cotton Valley sands region. It also owns and operates a gas processing plant in the region. Bonanza Creek was formed in 2006 and filed to go public in 2011.

Bonanza Creek Energy, Inc., incorporated in December 2010, is an oil and natural gas company engaged in the acquisition, exploration, development and production of onshore oil and associated liquids-rich natural gas in the United States. The Company’s assets and operations were focused primarily in southern Arkansas (Mid-Continent region) and the Denver Julesburg (DJ) and North Park Basins in Colorado (Rocky Mountain region) during the year ended December 31, 2010. In addition, it owns and operates oil producing assets in the San Joaquin Basin (California region). It operated approximately 99.4% and held an average working interest of approximately 85.8% of its proved reserves as of December 31, 2010. As of December 31, 2010, its net proved reserves was 32,860 million barrels of oil equivalent (MBoe).

410 17th Street
Suite 1500
Denver, CO 80202
United States

Bonanza Creek Energy (BCEI) priced at $17 a share, below the deal’s estimated range of $20 to $22 a share. With nearly 14.8 million shares up for sale in the IPO, it raised $251 million. The stock opened at $15.50 and fell nearly 20% to end at $13.61.

The Denver oil and natural gas company said it plans to raise $195.5 million by selling up to 11.5 million shares at $17 apiece. Earlier this month, Bonanza said it planned to sell those shares at $20 each.

Bonanza said it would use the cash generated from the sale to refinance company debts, and to pay for company operations.

The company owns oil and gas fields in Arkansas, Colorado and California with access to 32.9 million barrels of proven reserves. Its daily production in October was 4,831 barrels of oil equivalent per day. By the end of the year, Bonanza said it will have drilled 115 wells.

Morgan Stanley & Co. and Credit Suisse Securities are listed as joint book-running managers for the offering.

The Company’s proved reserves and its drilling locations in its Mid-Continent acreage are located in the Dorcheat Macedonia field and the McKamie Patton field. In the Dorcheat Macedonia field the Company averages a 83.3% working interest and 68.5% net revenue interest, and all of the Company’s acreage is held by production. It had approximately 78 gross (65.0 net) producing wells and its average net daily production during April 2011, was approximately 1,249 barrels of oil equivalent per day (Boe/d) from a proved reserves base of 15,247 million barrels of oil equivalent, of which about 64.5% was oil and natural gas liquids. As of April 30, 2011, the Company had drilled 13 gross (10.2 net) wells. Immediately northwest of the Dorcheat Macedonia field, it owns and operates the McKamie gas processing facility, which processes all of the gas from the field. It owns additional interests in the Mid-Continent region near the Dorcheat Macedonia field. These include interests in the McKamie-Patton, Atlanta and Beach Creek fields. Its estimated proved reserves in these fields as of December 31, 2010, were approximately 1,947.8 million barrels of oil equivalent, and average net daily production during April 2011, was approximately 239 barrels of oil equivalent per day.

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