On September 7, 2016, Noble Midstream Partners, an MLP of Noble Energy (NBL), filed a registration statement with the SEC for an IPO (initial public offering) of 12.5 million common units. The expected initial public offering price is between $19 and $21 per unit. Noble Midstream Partners’ common units have been approved for listing on the NYSE under the symbol “NBLX.”
Noble Midstream Partners expects to raise $230.4 million in net proceeds from the offering. The company planned to float an IPO earlier in November 2015 but postponed it.
The common units offered to the public represent ~39.3% LP (limited partner) interest in Noble Midstream Partners. Noble Energy and its subsidiaries will own the remaining LP interest as well as Noble Midstream Partners’ GP (general partner) and incentive distribution rights.
Minimum quarterly distributions
The above figure gives an overview of Noble Midstream Partners’ assets. Upon listing, Noble Midstream Partners plans to provide a minimum quarterly distribution of $0.375 per unit, or $1.5 per unit on an annualized basis. Based on the midpoint of the initial public offering price, this implies a distribution yield of 7.5%.
While some recovery in energy commodity prices has uplifted the energy midstream sector since February 2016, the broader market conditions have also improved recently. Noble Midstream Partners is the first energy MLP to issue an IPO in 2016.
Let’s take a look at Noble Midstream Partners’ business operations in the next part of the series.