Oklahoma City, Okla.-Based Bronco Drilling Reports IPO Plans

Jul. 21–Oklahoma City energy company Bronco Drilling Co. Inc. plans to become the state’s newest publicly traded company with an initial public offering as early as next month.

Bronco said it plans to issue 4.7 million shares at $14 to $16 a share in an IPO by Aug. 10. The company said it plans to use the $65 million to $75 million to repay about $18 million in debt and refurbish about 19 drilling rigs.

After the offering, Bronco would be traded on the Nasdaq under the symbol “BRNC.”

“We’ve been told we’ll be well received,” said Frank Harrison, Bronco’s chief executive officer. “It’s a great time to be in the land drilling business. This is really the only way to expand in the drilling business. It would be very hard to borrow enough to expand. This business is cap (capital) intensive, and the public market is the place to get that.”

Mickey Thompson, president of the Oklahoma Independent Petroleum Association, said the industry will welcome the additional money and drilling rigs.

“I think it gives the small producer a better shot at developing resources with prices being where they are,” Thompson said. “I’m sure those rigs won’t be reserved only for small producers, but the odds are some of those would find their way to work for smaller companies, who are having to wait six or nine months for drilling rigs these days because of the high demand for equipment.”

Bronco has 14 operational rigs and another 19 it plans to refurbish. With the anticipated revenue form the IPO, the company plans to roll out a new rig every 60 days starting in 2006. The company has more than 400 employees.

Bronco is the third state company to announce its intention to become publicly traded on a major index after nearly four years of drought in the Oklahoma IPO market.

“What companies like Bronco are doing now is going out to Wall Street and having that money from New York and around the U.S. flow into Oklahoma,” said Bob Rader, senior vice president of Capital West Securities in Oklahoma City. “It’s great for the state to have that capital coming into the state.”

The other IPOs were conducted by an Enid based natural gas partnership, Hiland Partners LP, and Orchids Paper Products of Pryor.

Thompson said the energy industry likely will see more IPOs in the future

“I think some of the mid- to large-size privately held independent producers are looking at going public as a way to monitize their assets,” Thompson said. “The commodity price scenario going forward is so positive at this point that some small independent producers are going to sell out and take their chips completely off the table. And I think those that don’t want to sell out will look at going public.”

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