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FTS International Idea Proposal (FTSI)

FTS International Idea Proposal (FTSI)
 

Does FTS International possess any strengths or unique services that will ensure a successful IPO?

Report Available: June 1, 2017

 

Blueshift’s initial research found FTSI and several other oil and gas service providers intending to launch an initial public offering earlier in the year, but plans were delayed by declining oil prices in Q1. FTSI said demand is increasing, it boasts of coverage in every major shale play, and performs across the most active major unconventional basins in the U.S. Still, it remains to be seen if FTSI has enough differentiation to drive a successful IPO.

 

Observations

  1. FTSI filed Form S-1 with the SEC on February 10 and announced its intention to launch an IPO. In the S-1 prospectus, FTSI indicated that demand for its service was increasing and, as of January 2017, the company had 20 of its 32 fraccing fleets active in five different oil and gas basins. Part of the proceeds generated by the IPO would be used to reactivate the rest of the fleet in 2017 and 2018.
  2. An April 7 article said weak Q1 oil prices have stunted the U.S. energy IPO environment causing six U.S. energy companies that filed for listings, including FTSI, to delay their launch. Oil prices declined 6.5% during the quarter, leading to uncertainty over where pricing is headed. These current market conditions are said to be ripe for mergers and acquisitions.
  3. FTSI claims its competitive edge comes from being the largest private well completion company in North America with wireline services in all major U.S. shale plays. A strong customer base includes contracts with large independent E&P companies such as Devon Energy Corporation, EOG Resources, EP Energy Corporation, EQT Production Company, and Newfield Exploration Company.
  4. FTSI also touts that it is a pure-play well completions company with 130,000 fracturing stages performed across the most active major unconventional basins in the U.S. since 2010. The company has in-house custom design, manufacturing, assembling, and servicing of their hydraulic fracturing units and proprietary pumps used in its fleets which leads to cost and performance advantages.

 

What are FTSI’s strengths that will lead to a successful IPO? What, if any, differentiating features or services does FTSI offer the oil and gas industry? How will current and future market conditions affect the IPO?  What roadblocks or headwinds could derail FTSI’s IPO? To answer these and other questions, Blueshift will issue a market research report by gathering data from independent sources in the following areas: E&P companies that have contracted with FTSI, E&P companies that use competitors, Competitors, and Industry specialists.

 

Companies: Halliburton Company (HAL),Schlumberger Limited (SLB), RPC Inc. (RES), Liberty Oilfield Services (BDFC)

 

Research Begins: May 15, 2017