Vine Energy stock is coming to the market. The natural gas company from Plano, Texas announced that it has launched an initial public offering of 18,750,000 shares of its Class A common stock. However, is it smart to invest in the Vine Energy IPO?

Vine Energy Stock Offering Price and More

Vine Energy was founded in 2014. Its subsidiaries include Vine Oil & Gas and Vine Resources Holdings.

Vine Oil & Gas was established to acquire “high-return natural gas assets in the prolific Haynesville basin.” And it has done just that.

In six years, the company now holds an average operating working interest of approximately 80% in 188,000 acres across the core of the Haynesville basin. It also operates 925 million cubic feet per day (MMcfd) of production across the Sabine, DeSoto and Red River parishes in Northern Louisiana.

This makes Vine Energy one of the most prominent drillers at one of the largest natural gas resources in North America. And it has investors licking their chops for Vine Energy stock.

With a Vine Energy IPO on the way, it’s only a matter of time before this company becomes one of the most sought-after oil stocks on the market.

Vine Energy filed to raise $328 million from its IPO. The company will use the net proceeds from the offering to repay in full and terminate certain existing credit facilities of its subsidiaries. The remaining net proceeds will cover general corporate purposes.

The initial offering price is projected to be between $16 and $19 per share. And the company will list on the New York Stock Exchange under the ticker symbol “VEI.”

Moreover, the company intends to grant underwriters a 30-day option to purchase up to an additional 2,812,500 shares of Class A common stock at the IPO price.

Vine Energy IPO and Oil Stocks

Vine Energy filed its registration statement with the Securities and Exchange Commission (SEC) on March 9, 2021. And it’s creating a lot of buzz within the industry.

Everyone took a hit due to the COVID-19 pandemic. But with Vine Energy stock on the way, the company is preparing for a period of strong economic growth once the shortfalls of the coronavirus begin to disappear.

The entire industry is hoping to see better results over the next year. So, it may be the perfect time for a Vine Energy IPO. And this is why many investors are considering this upcoming oil stock for their portfolios.

Vine Energy Stock Evaluation

Oil stocks are an intriguing option for traders and investors alike. But it’s important to do your research before adding this company to your portfolio.

And let’s begin with the Haynesville basin where Vine Oil & Gas is making its mark. According to the Energy Information Administration, the Haynesville shale formation produces roughly 8.5% of the total U.S. dry natural gas production.

That’s a great start in terms of recent production. However, the area is historically known to require higher costs due to deeper formation depths.

New innovations are lowering costs as the industry fights to recover from the pandemic. But will things turn around in the near future? That is the question on the minds of investors across the country. Assuming a successful IPO, the company’s enterprise value will be approximately $2.4 billion.

Investing in Oil Stocks

Oil stocks can enhance your portfolio and here are five of the top oil stocks you can invest in today. It’s also important to stay ahead of quarterly financial results, news cycles and the IPO process.

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Investing in the upcoming Vine Energy IPO may turn out to be a lucrative decision. Therefore, keep a close eye on Vine Energy stock once it hits the market.