FTS International Closes in on IPO

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FTS International has filed an amended S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering (IPO). The company expects to price its 19.5 million shares in the range of $15 to $18 per share, with an overallotment option for an additional 2.925 million shares. At the maximum price, the entire offering is valued up to $403.65 million. The company intends to list its shares on the New York Stock Exchange under the symbol FTSI.

The underwriters for the offering are Credit Suisse, Morgan Stanley, Barclays, Citigroup, Wells Fargo Securities, Evercore ISI, Cowen, Guggenheim, Simmons, as well as Tudor, Pickering, Holt.

This is one of the largest providers of hydraulic fracturing services in North America. Its services enhance hydrocarbon flow from oil and natural gas wells drilled by exploration and production (E&P), companies in shale and other unconventional resource formations. Its customers include Chesapeake Energy, ConocoPhillips, Devon Energy, EOG Resources, Diamondback Energy, EQT, Range Resources and other leading E&P companies that specialize in unconventional oil and natural gas resources in North America.

FTS is one of the top three hydraulic fracturing providers across its operating footprint, which consists of five of the most active major unconventional basins in the United States: the Permian Basin, the SCOOP/STACK Formation, the Marcellus/Utica Shale, the Eagle Ford Shale and the Haynesville Shale.

In the filing, the company further detailed:

We have 1.6 million total hydraulic horsepower across 32 fleets, with 27 fleets active as of January 8, 2018. We are experiencing a surge in demand for our services, which has led us to reactivate 10 fleets since the beginning of 2017. Based on continued requests from customers for additional fleets, we are in the process of reactivating additional equipment at our in-house manufacturing facility. We believe we can reactivate all of our idle equipment for approximately $34 million, allowing us to further increase our operating fleets by five fleets, or approximately 19%, over the next nine months.

The company intends to use the net proceeds from this offering for general corporate purposes, which will include repaying indebtedness.