Like vinyl records, bucket hats and mirrored sunglasses, past trends have a habit of reemerging.

In the oil and gas industry, upstream E&Ps are starting to dust off the IPOs and see whether they still fit.

A handful of companies are beginning to file IPOs or have raised speculation that they’re at least contemplating a public offering. Despite the monster values produced by Permian Basin transactions, the companies seeking a market breakthrough aren’t based in the Midland or Delaware just yet.

Extraction Oil & Gas Inc., a Denver-based company concentrated in the Denver-Julesburg (D-J) Basin, filed for a $100 million IPO on Sept. 14. Vantage Energy Inc., based in Englewood, Colo., also filed paperwork for an IPO on Sept. 13, hoping to take its Appalachian and Barnett assets public.

The companies offer test cases for the market as signs of life—more rigs, and a receptive public equity market for some companies—return to the industry. The first energy IPO of the year, though infrastructure-centric, was a success. Noble Midstream Partners LP, a Noble Energy Inc. (NYSE: NBL), subsidiary, said on Sept. 14 it raised $281 million.

Extraction and Vantage face hurdles, however. The companies aren’t connected to what is currently the beating heart of the industry: the Permian Basin.

“No question, the deals will be tougher to do,” said Gabriele Sorbara, an analyst for The Williams Capital Group.

Vantage is making its second attempt to launch an IPO, Sorbara told Hart Energy.

“Appalachia has lost its sexiness,” he said. “Extraction Oil & Gas is more interesting than [Vantage] given its 100,000 net acres in the core Wattenberg Field.”

Extraction, however, will be caught in the regulatory overhang in which Colorado state officials are attempting to make it more difficult to change the state’s constitution.

The last upstream E&P to try its hand at an IPO was the Delaware Basin’s Centennial Resource Development LLC. However, after filing paperwork with the U.S. Securities and Exchange Commission (SEC) in June, Silver Run Acquisition Corp. (NASDAQ: SRAQ) bought the company for roughly $1.5 billion in July. Centennial would have been the first U.S. upstream IPO since June 2014.

However, potential Delaware Basin IPOs are on the horizon, Sorbara said.

“There is chatter some Delaware Basin companies could file. We’ve got our eyes out for Brigham Resources and Jagged Peak Energy,” he said.

Extraction Traction

Extraction Oil & Gas is a pure play company focusing on the Wattenberg Basin. The company holds 224,000 net acres and produces 37,300 barrels of oil equivalent per day (boe/d).

Its motives for an IPO seem clear-cut. In July, the company purchased Bayswater Exploration & Production LLC and affiliates in the Wattenberg for $420 million cash.

The company’s prospectus said it intends to use the net proceeds from the offering to pay debt and a portion of the price for the Bayswater acquisition. The remaining net proceeds will be used for general corporate purposes, including funding 2016 and 2017 capex.

As of June 30, Extraction owed $235 million in borrowings under its revolving credit facility.

The company’s current investors include Yorktown Energy Partners, Bronco Investments, Neuberger Berman and Blackrock, according to Baird Equity Research.

The Bayswater assets consist of working interests in about 6,100 net acres where about 10,000 net boe/d—73% oil or NGL—were produced.

Extraction is running a two-rig program with flexibility to adjust its rig count based on the commodity price environment, according to its SEC filings.

The company managed a four-rig drilling program in first-quarter 2015.

“Due to significant improvements in our drilling efficiency since late 2014, each of our rigs is currently able to drill over twice as many wells per year as we were previously able to drill,” the company said.

Extraction, led by president Matt Owens, was founded in November 2012 and has kept focus on the Wattenberg. For first-half 2016, the company operated 95% of its horizontal production, while maintaining control of a large majority of its drilling inventory.

In first-half 2016, Extraction’s capex was $137.8 million, excluding acquisitions, and about $365 million for the year. That compared to $398.4 million for all of 2015.

In 2017, Extraction’s capital budget is anticipated to be about $590 million, substantially all of which is intended to go toward Wattenberg Field development.

“We intend to allocate approximately $535 million of our 2017 capital budget to the drilling of 138 gross [102 net] operated wells and the completion of 120 gross [102 net] operated wells,” the company said.

Advantage Vantage

Earlier this year, in stealth A&D mode, Vantage Energy bought into a prime spot in one of the core counties of the Marcellus Shale—Greene County, Pa.

Rice Energy Inc. (NYSE: RICE) bid $200 million on Alpha Natural Resources' core Marcellus and Utica acreageonly to be outmaneuvered by Vantage’s $339.5 million bid.

The deal adds about 31,323 net acres in the highly sought-after county and includes nonoperating royalty interests in 42 producing Marcellus horizontal wells, and related midstream and other assets.

The Alpha acquisition added 330 identified drilling locations including 226 in the Marcellus Shale, 72 in the Upper Devonian Shale and 32 in the Utica Shale.

In the Appalachian Basin, Vantage is a company that has paid its dues, steadily building its position since December 2010 from less than 200 net acres to about 88,634 net acres.

At the end of 2011, the company’s net daily production was 18 million cubic feet equivalent per day (MMcfe/d). In the first three months of 2016, production reached 398.5 MMcfe/d, representing a compounded annual growth rate of 98.7%.

For now, Vantage is focused on acreage swaps and infill lease acquisitions to further consolidate acreage, increase net lateral lengths and create operational efficiencies.

Rounding out its upstream portfolio, the company holds 37,481 net acres in the Barnett Shale.

The Barnett Shale remains a productive shale play, producing 4.4 Bcf of natural gas in 2015, according to the Texas Railroad Commission.

Vantage also owns and operates infrastructure in Greene, including a natural gas gathering system with complementary water sourcing and distribution assets.

The company intends to seek out commercial, third-party gathering and water opportunities on its system.

Darren Barbee can be reached at dbarbee@hartenergy.com.