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IPO Report: Cypress Energy Partners LP (CELP)

By  +Follow January 14, 2014 12:31PM
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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

Mrkt

Price /

Price /

Price /

Price /

% offered

12 mos ended Sept /13

Cap (mm)

Sls

Erngs

BkVlue

TanBV

in IPO

Cypress Energy Partners, L.P. (CELP)

$236

2.6

13.9

1.6

6.2

32%

             

Glossary

           


Conclusion

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.

Business

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.

Competition

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
Dakota Financial
17 Dec 14 14:21:12
Insider Buying: Cypress Energy Partners Insider Acquires 3,000 Shares of Stock $CELP http://t.co/NuVa4Cu3a5
Ticker Report
17 Dec 14 05:30:52
Insider Buying: Cypress Energy Partners Insider Purchases 3,000 Shares of Stock $CELP http://t.co/koskYDyvS4
StockNewsWires
16 Dec 14 19:33:03
$CELP: Cypress Energy Partners Insider Purchases $50700 in Stock (CELP) http://t.co/5Y9zISxA7t http://t.co/7ZveZf7WyH
Analyst Ratings
16 Dec 14 15:10:15
Want automatic email alerts for $CELP $RICE $AMC $RSPP $CORI? Subscribe to ARN Daily http://t.co/nSJuDtP5Bv
News Box
15 Dec 14 20:18:03
$CELP: Insider Buying: Cypress Energy Partners Insider Acquires 3000 ... http://t.co/XYHZEylyg2 http://t.co/IGjLamKTXZ
US Banking News
15 Dec 14 19:59:12
Cypress Energy Partners Insider John T. Mcnabb II Acquires 3,000 Shares $CELP http://t.co/askfpOH5PP
InterCooler
15 Dec 14 19:51:57
Cypress Energy Partners Insider John T. Mcnabb II Acquires 3,000 Shares $CELP http://t.co/ClyydkDMl1
ProVesting
15 Dec 14 19:48:04
$CELP: Cypress Energy Partners Insider John T. Mcnabb II Acquires 3000 ... http://t.co/tQBh5YLIbi http://t.co/xH2kekstCt
John Allen
15 Dec 14 18:09:34
RT @StockBase: $CELP - Cypress Energy Partners had some insider buying today: 3,000 shares at $16.9 - $50,700 worth http://t.co/AtxdjO8QCn
StockBase
15 Dec 14 18:08:29
$CELP - Cypress Energy Partners had some insider buying today: 3,000 shares at $16.9 - $50,700 worth http://t.co/AtxdjO8QCn
Ticker Report
11 Dec 14 09:41:58
Cypress Energy Partners Insider George L. Austin Purchases 7,500 Shares $CELP http://t.co/XcuzSzYaEN
StockNewsWires
11 Dec 14 09:35:02
$CELP: Cypress Energy Partners Insider George L. Austin Purchases 7500 ... http://t.co/WqLFrIQz50 http://t.co/RZSvnzIp0n
Chayton Falke
11 Dec 14 08:45:06
Top Twenty Recent Exits #11: Covered $CELP short for a 21.55% gain in 11 days. #trading #CELP #forex #stocks
Eyang Sukur
10 Dec 14 22:46:56
RT Chayton Falke ChaytonFalke : Top Twenty Recent Exits #11: Covered $CELP short for a 21.55% gain in 11 days. #trading #CELP #forex #st...
Chayton Falke
10 Dec 14 22:45:02
Top Twenty Recent Exits #11: Covered $CELP short for a 21.55% gain in 11 days. #trading #CELP #forex #stocks
JL
10 Dec 14 13:39:01
$COST Daily Chart- $TPLM $SAEX $GDP $SHMO $MBII $GBIM $SSE $CELP $BAC $T $VZ $SPY $AAPL $BABA $GMCR $GPRO $MSFT $WMT http://t.co/bjEroyyzbl
Sleek Money
10 Dec 14 06:38:57
Insider Buying: George L. Austin Acquires 7,500 Shares of Cypress Energy Partners Stock $CELP http://t.co/s4nLgQ05hS
JL
9 Dec 14 19:58:35
$JNUG Stock Technical Analysis - 12-09-14 - watch here: http://t.co/ovbpx4maIG $TPLM $SAEX $GDP $SHMO $MBII $GBIM $SSE $CELP $BAC $T $VZ
JL
9 Dec 14 19:56:03
$BLUE Stock Technical Analysis - 12-09-14 - watch here: http://t.co/3uFw4Vt2AP $TPLM $SAEX $GDP $SHMO $MBII $GBIM $SSE $CELP $BAC $T $VZ $GE
US Banking News
9 Dec 14 19:54:47
Insider Buying: George L. Austin Purchases 7,500 Shares of Cypress Energy Partners Stock $CELP http://t.co/RNWyP11X87
InterCooler
9 Dec 14 19:48:37
Insider Buying: Cypress Energy Partners Insider Acquires 7,500 Shares of Stock $CELP http://t.co/kfF8cYJTTT
				
				
By  +Follow January 14, 2014 12:31PM
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