Ophir Energy looks to raise $400 mln in London IPO
Thu Jun 9, 2011 10:02am GMT
By Sarah Young and Kylie MacLellan
LONDON(Reuters) - Oil and gas company Ophir Energy plans to raise $350-$400 million from a London listing that could value the Africa-focused firm at more than $1 billion.
The company, which is backed by Indian steel magnate Lakshmi Mittal, said on Thursday the new funds would be used to finance further exploration drilling and added that it aimed to complete the listing in July, subject to market conditions.
Europe's IPO market has had a difficult year, with more than 15 deals pulled and many of those that were executed have fallen below their offer price.
This has made jaded investors increasingly sceptical about taking part in new share sales unless they are offered at a considerable discount.
Ophir's market capitalisation once the float is completed is expected to be above $1 billion, a source familiar with the situation said.
The funds raised will be from new shares, with existing shareholders not intending to reduce their stakes, two sources close to the deal said.
Investor appetite for oil and gas companies appeared to be gaining momentum on Thursday after a new venture targeting oil assets under financier Nathaniel Rothschild said it would raise 1 billion pounds and European shale gas explorer 3Legs Resources made its debut on Thursday, raising 62.5 million pounds.
EAST AFRICA
Ophir is partnered with British gas firm BG Group off the coast of Tanzania in East Africa, where the two have made gas discoveries and are considering building a liquid natural gas development to commercialise resources, Ophir said.
Interest in East Africa as a new hydrocarbon region has been building in recent years after major discoveries by Tullow Oil
in Uganda and Anadarko in Mozambique. Ophir also has assets in Somaliland and Madagascar.
The funds raised through the listing will be used to finance the drilling of 11 wells in four different countries over the next 18 months, said Ophir.
Ophir last raised funds in 2008, when Mittal Investments acquired a 21 percent stake alongside existing shareholders including hedge fund Och Ziff, in a transaction that valued the company at 558 million pounds.
"We feel that now is the right time to bring the company to the public market in order to facilitate the next stage in Ophir's development," said executive deputy chairman Alan Stein.
Ophir will spend around two weeks marketing the offering, with a price range expected to be set the week beginning June 20 and the listing due to be completed in the first week of July, a source close to the deal said.
The offering is being run by Credit Suisse, with J.P. Morgan and RBC Capital also acting as bookrunners.