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E&P IPO Review - Bonanza Creek, Laredo, Sanchez Energy

posted Dec 18, 2011, 9:54 PM by Jeff Davies   [ updated Dec 18, 2011, 9:55 PM ]
Three E&P IPOs came to market last week looking for holiday cheer.  Unfortunately two of the three were naughty to investors while only Laredo was nice.  Returns from pricing to Friday's close:

Bonanza Creek (BCEI), -20.0%
Sanchez Energy (SN), -16.3%
Laredo Petroleum (LPI), +10.6%

Bonanza left investors up the creek without a paddle, while I just can't help but think of a 'dirty sanchez' when I see Sanchez Energy down 16% in three days, including 17% on first day of trading.  Well done supporting the SN deal Johnson Rice.  EFS pure-play, Niobrara/Granite Wash and Permian/Granite Wash was the basin optionality between the three, but all had more than your average structural complexity.  Nobody wants to do that much work around the holidays, so these were probably easy to pass on for complexity reasons alone including sponsor involvement, transactions between related parties and pure acreage-based valuations.  Anyway, quick summaries from the S-1's at link below (tabs at top to view each company sheet).....