Noble Midstream Partners Prices IPO At $22.50/unit

Noble Midstream Partners LP, a growth-oriented master limited partnership formed by its sponsor, Noble Energy Inc. (NYSE:NBL) , announced the pricing of its initial public offering of 12,500,000 common units.

The units, representing limited partner interest in Noble Midstream, were priced at $22.50 each. The partnership, formed to own, operate, develop and acquire a wide range of domestic midstream infrastructure assets, had previously planned to price the common units between $19.00 and $21.00 a unit. Noble Midstream has also offered underwriters a window of 30 days to purchase up to an additional 1,875,000 units at the same price.

In Nov 2015, the company was compelled to shelve its plans to go public due to a stressed commodity price environment. However, Noble Midstream resumed its plans of going public after a modest improvement in oil prices. We believe that this will raise investors’ hopes of further IPOs in the near future.

Noble Midstream’s units will start trading on the New York Stock Exchange on Sep 15 under the ticker symbol "NBLX." The offering is expected to close on Sep 20, subject to customary closing conditions.

Holdings Post the IPO

After closing the initial public offering, public will own 39.3% of the partner interest in the company, or approximately 45.2%, subject to the underwriters’ discretion to exercise their full option to purchase additional common units.

Noble Energy and some of its subsidiaries will own the remaining limited partner interest in Noble Midstream, its incentive distribution rights and also will own Noble Midstream’s general partner.

Utilization of Net Proceeds

Noble Midstream plans to utilize net proceeds of nearly $259.7 million to primarily make a cash distribution of nearly $257.4 million to Noble Energy.

A Recent IPO

Stellar Acquisition III Inc. (NASDAQ:STLRU) declared the closing of an initial public offering of 6,500,000 units. The offering was priced at $10.00 per unit resulting in a gross proceed of $65 million.

Zacks Rank & Key Picks

We currently do not have a rank for the Noble Midstream as it is an IPO, but some well ranked stocks in the oil and gas pipeline industry include Archrock Partners, L.P. (NASDAQ:APLP) and TC PipeLines, LP (NYSE:TCP) . Both these stocks sport a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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