Flowco is going public this week.
If you’re unfamiliar, Flowco provides methane mitigation solutions (among other things), for the oil and gas industry. This is a market that doesn’t get much retail investor attention, but it should.
You see, methane leaks are not only major environmental burdens, but methane itself does have value. Value that oil and gas producers would much rather maximize than lose due to leaks. Assuming there’s a beneficial ROI in doing so. After all, if the cost to mitigate methane is more than the value of the methane itself, it’s easy to see why some exploration and production companies would eschew integrating methane mitigation into their operations. And let’s face it: typically, environmental damage is only a consideration if it's made by force. Which is why I’m keen on any company that can provide methane mitigation solutions in a way that makes economic sense for oil and gas producers.
Flowco is Legit
Flowco’s methane mitigation technology, along with its other suite of products, helps producers capture and monetize methane and natural gas liquids by improving operational efficiencies and minimizing product loss.
Now there are other companies that provide similar methane mitigation solutions. But I should point out that Flowco’s vertically-integrated supply chain does give it a bit of an advantage.
The company domestically manufactures its core technologies, which minimizes the risk of delays and enhances quality control efforts. This also allows Flowco to quickly address customer-specific requests. Those considering an investment in this space should not trivialize the value of domestic manufacturing.
From 2022 to Q3, 2024, Flowco grew revenue more than 135%, from $148.6 million to $349.28 million. Gross profit also increased more than 89% during that time, from $93.1 million to $176.25 million.
As of September, 30, 2024, the company had $23.1 million in cash with $689.4 million in total liabilities.
Flowco is looking to raise nearly $400 million, offering 17.9 million shares at between $21 and $23 a share. It will trade on the NYSE under the symbol “FLOC.”
With an increase in LNG exports expected for 2025, along with a general increase in electricity demand for the foreseeable future, Flowco is in a good position to capitalize.
