0R15 9025.0 0.0% 0R1E 9410.0 0.0% 0M69 None None% 0R2V 247.99 9682.643% 0QYR 1567.5 0.0% 0QYP 439.3701 -2.9016% 0RUK None None% 0RYA 1597.0 1.2682% 0RIH 195.55 0.0% 0RIH 191.4 -2.1222% 0R1O 225.5 9683.0803% 0R1O None None% 0QFP 10475.8496 107.8542% 0M2Z 252.573 0.2373% 0VSO 33.0 -7.3164% 0R1I None None% 0QZI 622.0 0.0% 0QZ0 220.0 0.0% 0NZF None None% 0YXG 222.05 -4.1318%
The Offering
Company Overview
Excelerate Energy, Inc. (hereinafter referred to as “Excelerate Energy” or “The Company”) operates in the energy sector and is primarily focused on providing flexible liquefied natural gas (“LNG”) solutions to emerging markets. The company was incorporated in Delaware on September 10, 2021, aiming for cleaner, affordable, and reliable energy sources through regasified natural gas. The group has regional offices in eight countries and functions in the United States, Brazil, Argentina, Israel, United Arab Emirates, Pakistan, and Bangladesh. The firm is working towards decarbonization by limiting the usage of coal as a primary energy source and improving economic growth and the quality of life.
Source: IPO Prospectus
Key Highlights
Use of Proceeds: The company estimates that the net proceeds from this offering will be in the range of $340.2 million or $391.2 million, assuming an initial public offering price of $22.50 per share of Class A Common Stock. This estimate is post deduction of underwriting discounts and commissions but before deducting expenses of the offering and the reorganization payable. The company intends to use these proceeds for the following:
Dividend Policy: The company intends to pay an annualized cash dividend of $0.10 per share on a quarterly basis for Class A common stock. This quarterly dividend will commence in the second quarter of 2022 and will be paid in the third quarter of 2022. EELP will fund the dividend from the quarterly distribution amount of $0.6 million.
Experienced LNG Leader: The company is a renowned player in the LNG industry with a remarkable experience of 20 years in the development, construction, and operations, making it the most accomplished, reliable, and capable LNG company within the industry. This experience aided the firm in sourcing and aggregating LNG from the global market for delivery downstream, ensuring long-term stability and reliability. The firm also leverages its expertise and understanding of LNG market dynamics to create significant value via portfolio optimization and incremental cash flow.
Largest FSRU Owners: The company owns and operates one of the industry's largest fleets of Floating Storage and Regasification Units (FSRUs). This enables the company to adjust its production in response to changes in energy demand. This adaptable approach enables production optimization by swapping smaller Floating Storage and Regasification Units (FSRUs) for larger ones.
Pursuing Downstream Opportunities: To ensure the success of the new floating LNG terminals, the company is investing in new products and technologies. With decarbonization initiatives and rising electricity demand, natural gas has emerged as a potential alternative fuel source. This would be a significant opportunity for the company, in addition to product diversification and its goals of obtaining a cleaner, more affordable, and reliable energy source.
LNG- Recent Trends and Outlook
Rising LNG Demand: The global LNG demand is estimated at around 720 metric tons (MT) in 2040 from 360 MT in 2020, driven by strong demand from the Asian markets. Also, stability and transparency in the LNG price, coupled with readily available cargos, have made LNG an attractive source of fuel for commercial, industrial and transportation industries. The industrial usage of natural gas is expected to grow by approximately 33% from 2020 to 2050.
Appetite for Clean Fuel: Rising aspirations for carbon neutrality and curbing coal usage allow countries to switch to lower-carbon fuels such as LNG. Also, the current volatility in the energy market further reinforces LNG as a reliable and sustainable fuel source.
Financial Highlights
Source: IPO Prospectus
Key Management Highlights
Associated Risk (High)
Investment in the IPO of "EE" is exposed to a variety of risks such as:
Conclusion
Excelerate Energy has reported significant revenue growth of $888.55 million in FY21, and the management is optimistic about its future growth. The company is continuously expanding its operations through strategic diversification and acquisitions. Moreover, the company has uniquely positioned itself as a pioneer in flexible liquefied natural gas (“LNG”) solutions and working toward decarbonization.
However, given the uncertainty in the LNG demand and volatility in the worldwide natural gas prices and energy markets, there are significant uncertainties associated with forecasting the future revenues and expenses of the company.
Therefore, based on the above rationales, we have assigned the IPO of Excelerate Energy, Inc. with an “Attractive” rating. This IPO is only suitable for investors with a high-risk appetite given the associated risks and the current market scenario [basis further evaluation].
*Please note that an IPO can be postponed or put on Hold at the discretion of the company or regulatory authority.
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