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IPO Report: Cypress Energy Partners LP (CELP)

By  +Follow January 14, 2014 12:31PM
Tickers Mentioned:

Cypress Energy Partners LP ($CELP) is in the oilfield waste treatment, water and environmental services, and disposal business. CELP is a private-equity backed deal that looks like it was put together for the purposes of an IPO.

The Manager & Joint managers are Raymond James, Baird, Stifel, BMO Capital Markets. The Co-Managers are Janney Montgomery Scott, Wunderlich Securities. SEC Documents

CELP scheduled a $75 million IPO with a market capitalization of $237 million at a price range midpoint of $20 for Thursday, January 15, 2014. CELP was previously scheduled for Thursday.

The full IPO calendar can be found at IPOpremium. Five operating companies are scheduled to raise over $2 billion this week.

Valuation Ratios


Price /

Price /

Price /

Price /

% offered

12 mos ended Sept /13

Cap (mm)





in IPO

Cypress Energy Partners, L.P. (CELP)











Positive: yields 7.75%.

On a proforma basis for the 12 months ended September ’13, CELP was only able to cover 82% of the projected full payout covering the full number of units outstanding.


CELP is a growth-oriented master limited partnership that provides saltwater disposal (SWD) and other water and environmental services to U.S. onshore oil and natural gas producers and trucking companies.

Through its Water and Environmental Services segment, which is comprised of the historical operations of the SBG Predecessor and the CEP Successor, CELP owns and operates nine SWD facilities, seven of which are in the Bakken Shale region of the Williston Basin in North Dakota and two of which are in the Permian Basin in west Texas.

CELP also manages four other SWD facilities in the Bakken Shale region. CELP’s Water and Environmental Services segment customers are oil and natural gas exploration and production companies and trucking companies operating in the regions that CELP serves.

CELP’s Water and Environmental Services segment is comprised of the historical business of the CEP Successor. Through its Pipeline Inspection and Integrity Services segment, CELP provides independent pipeline inspection and integrity services to various energy, public utility and pipeline companies.

In both of these business segments, CELP works closely with its customers to help them comply with increasingly complex and strict environmental and safety rules and regulations applicable to production and pipeline operations and reduce their operating costs.

CELP generates revenue in its Water and Environmental Services segment primarily by treating flowback and produced water and injecting the saltwater into its SWD facilities. CELP’s results in the Water and Environmental Services segment are driven primarily by the volumes of produced water and flowback water CELP injects into its SWD facilities and the fees CELP charges for its services.

These fees are charged on a per barrel basis and vary based on the quantity and type of saltwater disposed, competitive dynamics, and operating costs.

In addition, for minimal marginal cost, CELP generates revenue by selling residual oil it recovers from the flowback and produced water. Through its 51% ownership interest in CES, CELP also generates revenue managing SWD facilities for a fee.


Water and Environmental Services Competition

CELP’s competition consists primarily of smaller regional companies that utilize a variety of disposal methods and generally serve specific geographical markets.

In addition, CELP faces competition from other large oil field service companies that also own trucking operations and CELP’s customers, who may have the option of using internal disposal methods instead of outsourcing to CELP or another third-party disposal company.

Pipeline Inspection and Integrity Services Competition

The pipeline inspection and integrity business is highly competitive. The TIR entities’ competition consists primarily of three types of companies: independent energy inspection firms, engineering and construction firms and diversified inspection service firms.

Diversified inspection firms may inspect, for example, electric and nuclear facilities in addition to pipelines.

5% stockholders

Cypress Energy Holdings, LLC owns 100.0% of Cypress Holdings II, LLC, which owns 100.0% of the general partner. Following this offering, Cypress Energy Holdings, LLC will own, indirectly through its ownership of Cypress Holdings II, LLC, 20.8% of CELP’s common units and 83.4% of CELP’s subordinated units.

The following table sets forth the beneficial ownership of Cypress Energy Holdings, LLC after this offering:

Name of Beneficial Owner                      Ownership Interest

Cynthia A. Field Trust (b)                                   36.750 %

Charles C. Stephenson, Jr.                                27.468 %

CEP Capital Partners, LLC                                 24.500 %

Use of proceeds

CELP expects to net $69.8 million from its IPO. Proceeds are allocated as follows:

To distribute all of these proceeds to a wholly owned subsidiary of Cypress Holdings as reimbursement for certain capital expenditures it incurred with respect to assets contributed to CELP.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.

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Results for celp
US Banking News
30 Jan 15 09:27:44
Cypress Energy Partners LP $CELP to Issue Dividend of $0.41 http://t.co/6lvFNvngmc
30 Jan 15 09:27:02
$CELP: Cypress Energy Partners LP (CELP) to Issue Dividend of $0.41: http://t.co/nPiNt6qrBs
30 Jan 15 09:18:16
Cypress Energy Partners LP $CELP to Issue Dividend of $0.41 http://t.co/ahBkIwZ4ZM
30 Jan 15 05:01:11
#Cypress Energy Partners : A Change in Tides: New Research on CrossAmerica, Cu... http://t.co/wZKFFAr8KU $CELP
US Banking News
29 Jan 15 22:21:28
Cypress Energy Partners LP announces dividend of $0.4064. Payable on 2/13/2015. http://t.co/8L52w22Vlm $CELP #CELP
SA Breaking News
29 Jan 15 14:13:23
Cypress Energy declares $0.4064 distribution http://t.co/Z1DEVcb94n $CELP
29 Jan 15 13:51:06
$CELP: Cypress Energy Partners Announces Fourth Quarter Cash Distribution: http://t.co/qUSeDiLnIG
Penny Stock Secret
27 Jan 15 20:41:06
This Guy Turned $100 into over $10,000 In Just 30 Days! http://t.co/vezCDY95do .. $CEL $CELP $CEM
By  +Follow January 14, 2014 12:31PM



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