EagleRock reportedly exploring US IPO worth up to $2bn

Permian Basin royalty firm EagleRock is reportedly exploring an initial public offering (IPO) in the US. Citing sources familiar with the matter, Reuters reported this week that an IPO could see the company valued at up to $2bn.

According to four of the sources, Houston-based EagleRock has hired Goldman Sachs to work on the potential listing, with two of them adding that an IPO could come during this quarter.

IPOs are comparatively rare among oil and gas companies, with investors showing limited appetite owing to environmental concerns, while private companies have tended to seek out publicly listed buyers instead, among other factors. However, the report about EagleRock’s potential listing comes amid a spike in crude prices as a result of the conflict in the Middle East. The US energy industry is also being bolstered by its location far from the conflict, and by the fact that oil and gas exports from the country have not been negatively affected.

In addition, Reuters noted that rising demand for natural gas to support power generation, especially for artificial intelligence (AI), was now driving investors back to oil and gas. The news service added that Permian-focused LandBridge and its water infrastructure affiliate WaterBridge represented a “logical” public comparison to EagleRock. LandBridge shares had gained almost 300% since its June 2024 IPO, while WaterBridge was up 26% since listing in September, it said.

According to EagleRock’s website, the company owns land in both the Delaware and Midland sub-basins of the Permian. It also water infrastructure assets in the Midland Basin and its land includes a long-term acreage dedication related to those assets.

The company says it differs from traditional mineral-focused business models by holding surface rights and collecting royalties by granting long-term access to land, water, pore space and infrastructure corridors. Such access has been “essential” to oil and gas development and is also increasingly “critical” to power, infrastructure, and technology-driven industries, according to EagleRock.

The company believes that its land will become more valuable as energy production continues over the long term and new industries emerge. It says its strategy is “designed to create long-term, compounding cash flow with minimal capital investment, delivering enduring value for shareholders”.

Reuters’ sources cautioned that because of the volatility of energy prices and stock markets, the timing of the IPO could fluctuate significantly, as could the resulting valuation. They forecast a valuation of between $1bn and $2bn.