First MLP IPO in 14 Months, Is This the Start of a New Beginning?

I heard there was finally an MLP IPO this year. Will you talk about the IPO and review MLP IPO history?

At the Alerian MLP Awards (The Ammys) this past February, we asked attendees to make predictions regarding the MLP space in 2016. One of the questions was, “How many MLP IPOs will there be in 2016?”

Spoiler Alert

The answers were as follows:

None: 48%
One or Two: 32%
Three or Four: 15%
More than Five: 5%

We can’t really blame the 48% who expected a goose egg this year. After all, we asked these questions on February 16, 2016, just five days after MLPs had hit their lowest point of the cycle. Fortunately, we’ve witnessed a recovery since this time, and last week (on September 14th) Noble Midstream Partners (NBLX) announced the pricing of its IPO of 12,500,000 common units. Encouragingly, the units priced at $22.50, above the original estimates of $19.00 to $21.00, for a total raise just around $280 million prior to fees. According to NBLX’s S-1, the company will provide crude oil, natural gas, and water-related midstream services (most assets are pipelines), to their sponsor, Noble Energy (NBL). Going forward, NBLX also plans to provide similar services to third parties.

Now, let’s quickly take a look back at MLP IPO history.

MLP IPOs Dropped Off Significantly as a Result of the Energy Cycle