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Williams IPO gains 12%
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February 6, 2001: 6:10 p.m. ET
Operator of energy assets rises $2.50; ATP Oil fails to rise
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NEW YORK (CNNfn) - Two energy-related offerings opened to moderate gains Tuesday with Williams Energy Partners LP grabbing the lead and rising nearly 12 percent.
Williams Energy Partners climbed $2.50 to close at $24 on the New York Stock Exchange while ATP Oil & Gas Corp. failed to close above its offering price on the Nasdaq.
The success of both deals signifies a rounding out of the IPO market, said analyst Steve Tuen, of IPO Value Monitor. "It's a good start in the sense that they're more subdued type of offerings, so less pure speculation is involved," Tuen said.
Tulsa, Okla.-based Williams Energy Partners LP (WEG: Research, Estimates) sold 4 million common units at $21.50 each via lead underwriters Lehman Brothers and Banc of America Securities. Williams had expected to price 3.6 million common units at $20 to $22 a share.
A limited partnership
The Williams Energy IPO is different from typical new issues because of its structure, Tuen said. Williams Energy is a limited partnership formed by Williams Cos. (WMB: Research, Estimates), an energy and communications firm. Companies going public usually use a corporation structure, Tuen said.
"The attraction with Williams is the yield you can get on the stock," he added.
 Williams Energy will attempt to pay a dividend of 52 cents a quarter, or $2.10 a year, according to an Securities & Exchange Commission filing.
Williams Energy operates and acquires a diversified portfolio of energy assets and mainly distributes refined petroleum and ammonia. The company's assets include four petroleum product terminal facilities along the Gulf Coast and near New York harbor, as well as 24 petroleum product terminals in the Southeastern U.S.
Parent firm Williams Cos. will own 2 percent of Williams Energy and a 67 percent limited partnership interest.
Williams Energy is profitable, with $16 million income on $21.4 million operating profit for the nine months ended Sept. 30.
More energy
ATP Oil & Gas Corp., a producer of oil and gas in the outer continental shelf of the Gulf of Mexico, also began trading Tuesday. ATP raised $84 million, below estimates, after selling 6 million shares at $14 each late Monday through lead underwriter Lehman Brothers.
The Houston-based company had planned to sell 7.5 million shares at $15 to $18 a share, up from the originally filed price range $15 to $17 a share. ATP Oil & Gas (ATPG: Research, Estimates) was expected to open last week but delayed its IPO. The company is profitable, with $1.4 million income on $59.3 million in revenue for the nine months ended Sept. 30.
ATP actually owns oil and gas assets while Williams provides storage facilities, so ATP is more sensitive to oil and gas prices, Tuen said.
"They're both in same industry but in different line of work," Tuen said. "ATP is affected more directly by oil and gas prices."
WestStar Environmental Inc., which handles non-hazardous liquid waste for governmental and residential customers, had yet to trade. The company priced its issue last week, selling 800,00 shares at $7.38 via underwriter Kashner Davidson Securities.
The company, which plans to trade under the Nasdaq Smallcap symbol "WSTX," was expected to open Tuesday.  
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